U.s. Trade deficit at highest level in ten years

U.S. trade deficit at highest level in ten years

Despite president donald trump’s tariff policy, the U.S. Trade deficit rose in december to its highest level in more than a decade.

According to the U.S. Department of commerce in washington, the deficit widened by 9.5 billion dollars to 59.8 billion dollars (52.8 billion euros).

This means that imports exceeded exports as strongly as they last did in october 2008. The previous month’s deficit was revised upward by 1.0 billion dollars to 50.3 billion dollars. The news was bound to displease trump; the issue has long been a major thorn in his side.

In 2018 as a whole, the deficit rose to 621 billion dollars, the highest level in ten years. This represents a year-on-year increase of 12.5 percent or 68.8 billion dollars.

Most recently, higher growth in the u.S. Than in other regions has driven up imports and widened the deficit. At the same time, U.S. Exports have been hurt by the high dollar exchange rate and additional tariffs.

To counteract the immense balance in the U.S. Trade balance, trump is relying in particular on higher tariffs, which make goods from abroad more expensive. For example, the US government sharply raised import barriers for steel and aluminum. So far, however, this approach has met with little success, as the figures from the ministry of commerce show.

Still, there is little to suggest that trump – who sees other countries’ high surpluses as the result of "unfair" trade agreements – will deviate from his previous line. The U.S. President is threatening to impose further special tariffs, which could soon be imposed on cars from the EU, for example.

The department of commerce had submitted a report to the president that auto imports could affect U.S. National security. On this basis, trump has been able to impose tariffs under certain circumstances without violating the rules of the world trade organization.

To prevent tariffs, the eu wants to reach an agreement with the u.S. That would provide duty-free treatment on all industrial products. That’s why trade commissioner cecilia malmstrom is in washington, where she was scheduled to meet with u.S. Trade representative robert lighthizer on wednesday. Among other things, she wants to let him know how far preparations for official trade talks on the EU side have progressed. So far, malmstrom has not received a negotiating mandate from the member states, countries like france and belgium want to wait and see.

Trump keeps criticizing high trade deficit. To reduce deficits, he puts pressure on major trading partners like china or the EU to import more from the U.S. Nevertheless, the deficit with china rose to a record $419.2 billion in 2018. Economists believe that the chronic trade deficit is primarily the result of persistently high consumption and low savings in the U.S.

Experts believe that one of the main reasons for the widening of the deficit last year was trump’s tax reform. The lower taxes to the treasury left businesses and consumers with more money, which should have boosted demand for imported goods.