US trade deficit hits 10-year high in 2018

Ongoing surge in imports defies Donald Trump’s election pledge to rein in deficit

The gap between US imports and exports widened in 2018 in a blow to the ambitions of Donald Trump to tackle the imbalance. Photograph: Saul Loeb/AFP/Getty Images

The gap between US imports and exports widened in 2018 in a blow to the ambitions of Donald Trump to tackle the imbalance. Photograph: Saul Loeb/AFP/Getty Images

 

The gap between US imports and exports widened in 2018, bringing the country’s trade deficit to more than $600 billion (€530 billion) and a 10-year high in a blow to the ambitions of Donald Trump to tackle the imbalance.

The goods and services deficit rose $68.8 billion (€60.8 billion) to $621 billion (€549.2 billion) last year, according to the US Census Bureau, as strength in the economy continued to fuel demand for imports.

It was the widest figure since 2008, when the deficit hit $709 billion (€627 billion).

The report defies one of Mr Trump’s key campaign promises to enact trade policies that would shrink the deficit. The higher deficit was driven by a strong US economy, which boosted purchases of imported goods, but also retaliatory levies on US exports, which made it harder for companies to sell abroad.

All-time high

Exports totalled $2.5 trillion (€2.21 trillion), an increase of $148.9 billion (€131.7 billion) year on year. Imports were up $217.7 billion (€192.5 billion) at more than $3.1 trillion (€2.7 trillion).

Data also showed that the US’s deficit in goods expanded 10.4 per cent to $891.3 billion (€788.3 billion), an all-time high. Its surplus in services grew 5.9 per cent to $270.2 billion (€238.9 billion).

The trade deficit with China, which is locked in trade negotiations with Washington, increased $43.6 billion (€38.5 billion) to $419.2 billion (€370.7 billion) last year.

– Copyright The Financial Times Limited 2019