In Trump's first year, America's trade deficit actually got worse

A container ship is docked at the Port of Miami Monday Feb. 5 2018 in Miami Beach Fla. The Commerce Department reports on the U.S. trade gap for December on Tuesday Feb. 6

In Trump's first year, America's trade deficit actually got worse

The increase in the trade deficit is highly sensitive at present given the Trump administration´s current crusade to simultaneously boost economic growth but improve the balance of trade.

Overall, in 2017, the US trade gap leaped 12.1 percent to a nine-year high of $566 billion. For all of 2017, the goods-and-services gap grew 12 per cent to US$566 billion, the biggest since 2008.

The fourth quarter was one of the worst; in December, the "trade deficit in goods and services rose to $53.1 billion, up from $50.4 billion in November and highest since October 2008", the AP reported.

While improving overseas growth and a weaker dollar bode well for exports, President Donald Trump's efforts to seek more favourable terms with United States trading partners remain a work in progress, and his tax-cut legislation may cause the deficit to widen further.

Trade was a hallmark issue of President Donald Trump's campaign. The deficit in goods with China jumped 8.1 percent hit a record $375 billion.

Trump has already placed tariffs on solar panels and washing machines in a shot across the bow at China and others, and he is expected to make a decision on imports of steel and aluminum in the next few months. Then there is the North American Free Trade Agreement with Mexico and Canada (NAFTA).

Imports of energy products increased 16.9 per cent to $3.0 billion in December, while industrial machinery, equipment and parts climbed 6.3 per cent to $5.0 billion. Even though Trump administration has made the goal to narrow the trade gap through his "America First" trade policies, it is really hard to achieve when the domestic economy is expanding and the customers' appetite for foreign-made products is strong.

The U.S. economy has run trade deficits for decades, during both economic expansions and recessions.

For the time being though, it should not provide reason to worry because growing imports went along with rising U.S. exports past year.

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