US Trade Deficit Rises to $566 Billion, Highest Since 2008

US Trade Deficit Rises to $566 Billion, Highest Since 2008

US Trade Deficit Rises to $566 Billion, Highest Since 2008

In 2017, "the goods deficit with China hit a record $375.2 billion" and the deficit with Mexico swelled to $71.1 billion, up from $55.6 in 2016.

The goods-trade deficit with southern neighbor Mexico increased 10 percent previous year to $71.1 billion, the highest since 2007.

So naturally, in his first year of office, the USA trade deficit hit its highest level in nine years. According to the Commerce Department, the foreign-trade gap in goods and services increased 5.3% from the prior month to a seasonally adjusted $53.1 billion in December, the highest level since October 2008.

For the time being though, it should not provide reason to worry because growing imports went along with rising United States exports a year ago. Trump has promised to reduce the deficits with China and Mexico, and the administration is renegotiating the North American Free Trade Agreement with Canada and Mexico and is considering imposing trade sanctions on China.

The Commerce Department released figures on Tuesday that shows the trade gap in goods and services rose to $566 billion previous year, the highest level since $708.7 billion in 2008.

In 2017, imports of beverages and food (137.8 billion), capital goods (640.6 billion), accessories and auto parts (359 billion) and consumer goods (602,2 billion) have all reached record levels, notes the Commerce Department.

The shortfall - the 11th in a row - exceeded the C$2.20 billion deficit predicted by analysts in a Reuters poll and was the seventh largest on record.

At the same time, the United States recorded a record level of exports to 29 countries, including Mexico (243 billion), China (130.4 billion) and the United Kingdom (56.3 billion). Last year, the U.S. imported more foreign cars, computers, mobile phones and other consumer goods, most of which were produced in China.

"When an economy is at full employment, an acceleration in demand tends to be accompanied by a pickup in import growth and a wider trade deficit", said John Ryding, chief economist at RDQ Economics. And he really wants to impose trade sanctions on China for the theft of US intellectual property.

Trump has said he plans to take a more forceful stance to bring down America's trade deficit.

The jump in the so-called real trade deficit at the end of the year puts trade on course to be a drag on gross domestic product in the first quarter.

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