The US trade gap with the rest of the world has hit a 10 year high. This comes after Donald Trump imposed tariffs last year on foreign steel, aluminium and Chinese products in the belief that these import taxes would ultimately reduce the trade imbalance.
However, it was revealed in a government announcement yesterday that the deficit jumped by nearly 19% in December, pushing the trade imbalance for all of 2018 to a decade-long high of $621 billion. In other words, the US exported fewer goods compared with how much it bought.
Trump’s ‘America first’ approach to the US-China trade deals, therefore, seems to have backfired. New data shows that the trade gap between the US and China also widened last year, as exports of American products and services fell, but imports from China rose.
This was announced yesterday amongst recent speculation that an agreement between both nations could be reached in the coming weeks. With this jump in US deficit and recent revelations that Trump will only accept a ‘perfect’ deal, it seems that there will be a fair few hurdles to cross before a deal can be made.
Despite this news, the dollar remains strong against both the pound and the euro.
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