The US trade deficit jumped by almost 19% in December, pushing the trade imbalance for all of 2018 to widen to a decade-long high of 621 billion US dollars.
The goods trade deficit with China rose to a record $419.2 billion, despite Trump's decision previous year to impose tariffs on $50 billion in imports from the country. Last year, he started with foreign steel and aluminium and a number of imports from China.
After eliminating the influence of prices, which renders the numbers used to calculate gross domestic product, the goods- trade deficit widened to US$1.01 trillion in 2018 from US$935.3 billion in 2017.
Imports of goods and services increased 2.1 percent to $264.9 billion in December, likely as businesses stocked up in anticipation of further duties on Chinese imports. Sales overseas increased 6.3% to $2.5-trillion in 2018, also the highest level. But the tariff hikes have since been postponed as the administration has cited progress in trade talks with China.
There is some irony in the fact that Trump's own policies - his $US1.5 trillion of tax cuts and the big increase in United States budget deficits and borrowing requirements - have contributed to the increased deficit.
Small or shrinking trade deficits are also not necessarily a measure of a healthy economy; in fact, as Bloomberg News' Shawn Donnan points out, the year the USA trade deficit shrank the most was 2009, which was not exactly a blockbuster year for the economy.
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But America's dependence on imports appears to have increased after the tariffs that Mr Trump imposed a year ago on foreign steel, aluminium and Chinese products.
For years candidate and then President Donald Trump boasted and bragged about what a great deal maker he is, while denigrating, destroying, and tearing up trade deals made by his Republican and Democratic predecessors.
New figures show that in 2018 fewer goods were exported from the United States than were bought by the country. Adjusted for inflation, December was the highest imbalance on trade goods in U.S. history.
"All countries run trade deficits whenever they consume more than they produce", said Kimberly Clausing, an economist at Reed College in Oregon.
"Exports increased $148.9 billion, or 6.3 percent".
The destructive and pointless absurdity of the Trump administration's aggressive trade policies showed up, quite predictably (to those outside the Trump administration) in a blow-out in the United States trade deficit in 2018.
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That study also found that workers in Republican-leaning counties, especially in farm states, suffered the greatest losses from tariffs that USA trading partners imposed in retaliation for the president's actions. As I noted yesterday, a new study on the economic costs of the tariffs shows they they are costing $1.4 billion every month-that's above and beyond the direct costs created by the tariffs, which have transferred more than $12 billion from American consumers to the U.S. Treasury in the form of higher taxes.
He's wrong about trade deficits reflecting weakness.
"The assumption now is that trade wars will intensify, and that growth will suffer as a result".
But soybean exports, a crucial crop across vast expanses of the country, fell 18% for the year to $18.2bn amid a Chinese boycott sparked by Trump's trade war.
Gary Cohn, director of the National Economic Council for the first 15 months of Trump's administration, had been president and chief operating officer of Goldman Sachs for more than a decade before he agreed to become Trump's top economic adviser.
"The flaw in how the market thinks is that it's less concerned than it should be about the longer-term outlook for free trade and what it could mean for corporate profitability, and whether the current global trading system is going to work as it has in the future", said Ronald Temple, co-head of multi-asset and head of USA equity at Lazard Asset Management.
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