US trade deficit surges to 10-year high; a record gap with China

[beijingwalker]

US trade deficit surges to 10-year high; a record gap with China
The skyrocketing US trade deficit hit the highest level in a decade last year despite Trump's global-trade offensive.

10 hours ago

The trade deficit has deteriorated despite the White House's protectionist trade policy [File: Evan Vucci/AP Photo]

The United States trade deficit surged to a 10-year high in 2018, with the politically sensitive shortfall with China hitting a record peak, despite the Trump administration slapping tariffs on a range of imported goods in an effort to shrink the gap.

The US Department of Commerce said on Wednesday that an 18.8 percent jump in the trade deficit in December had contributed to the $621bn shortfall last year. The 2018 deficit was the largest since 2008, and followed a $552.3bn gap in 2017.

The trade deficit has deteriorated despite the White House's protectionist trade policy, which President Donald Trump said is needed to shield manufacturers in the US from what he says is unfair foreign competition.

The US last year imposed tariffs on $250bn worth of goods imported from China, with Beijing hitting back with duties on $11bn worth of American products, including soya beans and other commodities.

Trump has delayed tariffs on $200bn worth of Chinese imports as negotiations to resolve the eight-month trade war continue.

The US has also slapped duties on imported steel, aluminium, solar panels and washing machines. The goods trade deficit with China increased 11.6 percent to an all-time high of $419.2bn in 2018. The US had record imports from 60 countries in 2018, led by China, Mexico and Germany. Imports of goods hit a record $2.6 trillion last year.

An acceleration in economic growth in 2018 from Trump's debt-funded tax cuts helped to boost the appetite for foreign goods.

The December trade deficit of $59.8bn was the largest since October 2008, and overshot economists' expectations for a $57.9bn shortfall, as exports fell for a third straight month and imports rebounded. The release of the December report was delayed by a 35-day partial shutdown of the government that ended on January 25.

When adjusted for inflation, the goods trade deficit surged $10bn to a record $91.6bn in December. The jump in the so-called "real goods" trade deficit suggests that trade likely drained the fourth-quarter gross domestic product more than initially estimated by the government.

The government reported last week that trade subtracted 0.22 of a percentage point from GDP growth in the fourth quarter. The economy grew at a 2.6 percent annualised rate in the October-December quarter, slowing from the third quarter's brisk 3.4 percent pace of growth.

The downbeat trade data - along with weak retail sales, construction spending, housing starts and business spending on equipment - set the economy on a low-growth trajectory in the first quarter.

https://www.aljazeera.com/news/2019...ar-high-record-gap-china-190306142057692.html

 

[Yongpeng Sun-Tastaufen]

It's been growing since the 1980s when Reagan started moving manufacturing from the US to China.

 

[powastick]

It's been growing since the 1980s when Reagan started moving manufacturing from the US to China.

US trade deficit mainly cause by US moving away from gold standard. After Brettonwood collapse in 1970s, US dollar became world currency and began printing money for goods. Reagan fault? More like Nixon and US bankers/wallstreet fat cats who benefited the most.

https://www.stlouisfed.org/publicat...uarter-2018/understanding-roots-trade-deficit

 

[TaiShang]

Record deficit is not only with China. With Mexico and the European Union, as well.

And the deficit is not only because imports increased, but also because exports decreased.

***

U.S. trade deficit jumps to 10-year high in 2018

CGTN

The U.S. trade deficit last year has surged to the highest level since 2008, according to a report by U.S. Commerce Department Wednesday.

Fresh data shows that the U.S. December trade deficit stood at 59.8 billion U.S. dollars, contributing to its whole-year trade deficit of 621 billion U.S. dollars.

The country's trade gap with China, Mexico and the European Union also widened sharply, the report showed. The goods trade deficit with China increased 11.6 percent to an all-time high of 419.2 billion U.S. dollars in 2018.

The trade deficit has deteriorated despite the White House's protectionist trade policy, which President Donald Trump said is needed to shield U.S. manufacturers from what he says is unfair foreign competition.

The release of the December report was delayed by a 35-day partial shutdown of the government that ended on January 25.

When adjusted for inflation, the goods trade deficit surged 10.0 billion U.S. dollars to a record 91.6 billion U.S. dollars in December. The jump in the so-called real goods trade deficit suggests that trade was probably a bigger drag on fourth-quarter gross domestic product than initially estimated by the government.

People shop at Macy's on Herlad Square during Black Friday, November 23, 2018. /VCG Photo

The government reported last week that trade subtracted 0.22 percentage point from GDP growth in the fourth quarter. The economy grew at a 2.6 percent annualized rate in the October-December quarter, slowing from the third quarter's brisk 3.4 percent pace.

The downbeat trade data joined weak December retail sales, construction spending, housing starts and business spending on equipment reports in setting the economy on a low growth trajectory in the first quarter.

The trade deficit in December was driven by 1.9 percent drop in exports of goods and services to a 10-month low of 205.1 billion U.S. dollars. Exports are weakening because of slowing global demand and a strong dollar, which is making U.S.-made goods less competitive on the international market.

Exports of industrial supplies and materials fell by 2.1 billion U.S. dollars, with shipments of petroleum products dropping 0.9 billion U.S. dollars and crude oil decreasing 0.5 billion U.S. dollars. Exports of capital goods dropped 1.7 billion U.S. dollars, led by a 1.0 billion U.S. dollars decline in civilian aircraft shipments.

In December, imports of goods and services increased 2.1 percent to 264.9 billion U.S. dollars. Consumer goods imports jumped 2.4 billion U.S. dollars, boosted by a 0.7 billion U.S. dollars increase in imports of household and kitchen appliances.

Cellphone imports increased 0.6 billion U.S. dollars. Capital goods imports increased 2.7 billion U.S. dollars, with imports of computer accessories rising 0.7 billion U.S. dollars. Computer imports also increased 0.7 billion U.S. dollars.

****

https://news.cgtn.com/news/3d3d414f7959544d33457a6333566d54/index.html

 

[Yongpeng Sun-Tastaufen]

Record deficit is not only with China. With Mexico and the European Union, as well.

And the deficit is not only because imports increased, but also because exports decreased.

***

U.S. trade deficit jumps to 10-year high in 2018

CGTN

The U.S. trade deficit last year has surged to the highest level since 2008, according to a report by U.S. Commerce Department Wednesday.

Fresh data shows that the U.S. December trade deficit stood at 59.8 billion U.S. dollars, contributing to its whole-year trade deficit of 621 billion U.S. dollars.

The country's trade gap with China, Mexico and the European Union also widened sharply, the report showed. The goods trade deficit with China increased 11.6 percent to an all-time high of 419.2 billion U.S. dollars in 2018.

The trade deficit has deteriorated despite the White House's protectionist trade policy, which President Donald Trump said is needed to shield U.S. manufacturers from what he says is unfair foreign competition.

The release of the December report was delayed by a 35-day partial shutdown of the government that ended on January 25.

When adjusted for inflation, the goods trade deficit surged 10.0 billion U.S. dollars to a record 91.6 billion U.S. dollars in December. The jump in the so-called real goods trade deficit suggests that trade was probably a bigger drag on fourth-quarter gross domestic product than initially estimated by the government.

People shop at Macy's on Herlad Square during Black Friday, November 23, 2018. /VCG Photo

The government reported last week that trade subtracted 0.22 percentage point from GDP growth in the fourth quarter. The economy grew at a 2.6 percent annualized rate in the October-December quarter, slowing from the third quarter's brisk 3.4 percent pace.

The downbeat trade data joined weak December retail sales, construction spending, housing starts and business spending on equipment reports in setting the economy on a low growth trajectory in the first quarter.

The trade deficit in December was driven by 1.9 percent drop in exports of goods and services to a 10-month low of 205.1 billion U.S. dollars. Exports are weakening because of slowing global demand and a strong dollar, which is making U.S.-made goods less competitive on the international market.

Exports of industrial supplies and materials fell by 2.1 billion U.S. dollars, with shipments of petroleum products dropping 0.9 billion U.S. dollars and crude oil decreasing 0.5 billion U.S. dollars. Exports of capital goods dropped 1.7 billion U.S. dollars, led by a 1.0 billion U.S. dollars decline in civilian aircraft shipments.

In December, imports of goods and services increased 2.1 percent to 264.9 billion U.S. dollars. Consumer goods imports jumped 2.4 billion U.S. dollars, boosted by a 0.7 billion U.S. dollars increase in imports of household and kitchen appliances.

Cellphone imports increased 0.6 billion U.S. dollars. Capital goods imports increased 2.7 billion U.S. dollars, with imports of computer accessories rising 0.7 billion U.S. dollars. Computer imports also increased 0.7 billion U.S. dollars.

****

https://news.cgtn.com/news/3d3d414f7959544d33457a6333566d54/index.html

The US hardly exports anything other than planes.

 

[TaiShang]

The US hardly exports anything other than planes.

It is mostly due to their economic structure. They need to look themselves first to find the root causes of chronic deficit.

**

US economic structure causes widening trade deficit: analyst

Source:Global Times Published: 2019/3/7

A container waiting to be shipped abroad is lifted by a crane at the Port of Lianyungang, East China's Jiangsu Province, on December 8, 2018. Photo: IC

The trade deficit China had with the US in 2018 set a record high, as US commerce data showed, which a Chinese expert said was caused by the US' internal economic structure and will not be easily reversed using external policy measures.

The burgeoning trade deficit, despite US President Donald Trump's efforts to reduce it, might be used by the US as an excuse to pressure China in the ongoing trade talks, a Chinese economist said on Thursday.

The US merchandise trade deficit with China, which represents the difference between goods exported and imported, soared to $419.2 billion in 2018, a record high, according to figures released by the US Department of Commerce on Wednesday.

The number also showed that the US dependence on imports from China increased, not decreased, even after the tariffs that Trump imposed upon a number of Chinese products like aluminum and furniture last year.

US imports from China increased by $34 billion to $539.5 billion in 2018, while exports from the US to China decreased by $9.6 billion to $120.3 billion.

Overall, the US trade imbalance soared to a 10-year high of $621 billion in 2018, up $68.8 billion from 2017, the US government statistics showed.

Li Chunding, a professor of college of economics and management under

the China Agricultural University, said that the record trade gap showed the attraction of China's exports, as well as the complementarity between China and the US.

According to Li, the US trade deficit is a result of the country's internal economic structure and it will not be easily reversed using external policy measures.

"The US economy is led by the services industry with its advantage in innovation and research and development. It does not have a labor advantage in the manufacturing industry - that's why it has a deficit in goods trade but a surplus in services," Li told the Global Times.

Also, the protectionist stance taken by the US has brought about market expectations for future risks, which has pushed some Chinese businesses to arrange US-bound exports ahead of schedule, Li said.

But he warned that the widening trade deficit might become an "excuse" for the US to increase pressure on China in the ongoing trade talks.

The two countries have engaged in rounds of trade talks recently trying to settle the trade dispute that developed last year, with each raising import tariffs on the other's goods.

According to a report by CBS News on Wednesday, officials from both countries have signaled that they are "close to some kind of agreement."

http://www.globaltimes.cn/content/1141366.shtml

 

[Dungeness]

Easy trade war I create,
Make US again great.
Hope of wining now leaving my gate,
Balloon of promise deflate.
Gnash teeth in raging hate:
Fxxk you all, dems, commie and teammate!

 

[Yongpeng Sun-Tastaufen]

This is 2018 numbers before trade war started. Wait for new numbers this year.

 

[Sanchez]

About 10% drop of exports to the US in Feb. It's a question of who can hold it longer. The potato countries like canada，australia and etc. would be the victims of Sino-US trade war.

 

[oprih]

So much winning.

 

[TaiShang]

This is 2018 numbers before trade war started. Wait for new numbers this year.

US trade deficit widened not only with China, but also with EU and Japan.

This is what will happen (with or without a trade agreement) this year:

The overall trade will decline, probably, but the deficit will increase.

US exports to China will decline three times more than its imports from China.

Most of the tariffs will be reflected on the consumer. US importers will continue to buy, if not as much.

So much winning.

By "winning," Trump mostly means winning the elections. Trade war is just a cover up.