President Donald Trump made the reduction of the trade deficit a key goal of his trade war, but the measure just hit its largest mark since 2008.
But despite the president's tariffs on steel, aluminum, and Chinese goods, strong US demand for imports and a strong dollar drove the deficit up to its highest level since 2008.
According to the Census Bureau, imports to the US increased to $218 billion in 2018, to $3.12 trillion, while exports grew just $149 billion, to $2.5 trillion. Looking just at goods — a figure that Trump also focuses on — the trade deficit increase by $83.8 billion $891 billion, a 10.4% jump from 2017. By contrast, the US actually maintained a $270 billion surplus in the trade of services, up $15 billion or 5.9% from 2017.— China — also grew substantially in 2018. The goods trade deficit with China hit $419 billion last year, an increase of $44 billion, according to Census Bureau data.
While Trump's goal for the trade war was to reduce the trade deficit, particular in goods, Trump's tariffs may actually be helping to drive the deficit increase. US companies rushed to bring in goods that were about to be subject to Trump's tariffs, driving up imports, while at the same time counter-tariffs by other countries like China and MexicoIn total, the trade deficit has increase by $119 billion in the two years since Trump took office, as the deficit came in at $502 billion in 2016.
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