USA trade deficit hits 10-year high despite tariff war

USA trade deficit hits 10-year high despite tariff war

In brief, what's going on with the USA trade deficit is mainly a result of macroeconomics, not trade policy. USA stock futures were marginally lower.

The U.S. trade deficit previous year has surged to the highest level since 2008, according to a report by U.S. Commerce Department Wednesday. He claims that the USA is being "ripped off" by other nations. The official insisted on anonymity to discuss private conversations. Trump is trying to reach a new trade deal with China and hopes to strike an agreement with President Xi Jinping in the coming weeks, but the stakes could not be higher. Americans want to buy things affordably, and with a hot economy, there is money to buy them.

WATCH: Who holds the power in potential U.S. Economists argue that doing so is a sign of "goods fetishism", which is one fetish there's incontrovertible evidence - i.e., his many, many comments and tweets on the issue - Mr. Trump clearly does indulge in. It followed in September with 10 percent duties on an additional $200 billion.

Trump has said the tariffs are meant to protect U.S.jobs and take a stand against what he views as poor business arrangements with Beijing. Nominal goods exports to China tanked by 33% year-over-year in December, likely as a result of China's retaliatory tariffs on USA goods.

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.

"The costs of the trade war are quite large relative to optimistic estimates of any gains that are likely to be achieved", wrote the trio of economists.

Although the strengthening dollar and slowing economic growth in some regions contribute to the widening deficits, the record number may also partly be the president's own making- thanks to the trade tension he started with major trading partners including China and the Tax Cuts and Jobs Act passed in 2017.

Would he really prefer that the US economy not be humming? But there are also secondary effects.

Any deal with China would mark a milestone in Trump's tariff war, though not its end. Many of China's concessions appear created to appease some USA concerns, rather than establish guidelines for trade that each country would be bound to follow.

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Bloomberg News does: "Tariff-Man Trump to Preside Over $100 Billion Jump in Trade Gap".

China's ceremonial legislature was poised this week to back a law that would discourage officials in the country from pressuring US companies to hand over technology. And that was where the tariffs came in, with the president imposing fees on a variety of imported goods.

But it's unclear whether China would actually enforce this commitment - a concern that could potentially prevent a meaningful trade agreement.

Markets are struggling for direction as traders await any update on negotiations between the U.S. and China on a trade agreement.

US officials also announced this week they planned to investigate Japanese titanium exports for possible tariff implementation.

Erin Ennis, vice president at the U.S. Yet Beijing would likely regard such a mechanism as infringing on its sovereignty.

Advocates of concluding a deal within the administration have seized on that fixation to bolster their case, one person said.

Beijing is also resisting US demands to change industrial policies, said Willy Lam, a political analyst at the Chinese University of Hong Kong. "The Chinese will never give this up".

It is that trade statistic that now hangs over several ongoing trade discussions, including an expected trade summit with China toward the end of March, that could largely reshape America's participation in worldwide commerce.

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