The U.S. trade deficit widened in 2018 to a 10-year high of $621 billion, bucking President Donald Trump’s pledges to reduce it, as tax cuts boosted domestic demand for imports while the strong dollar and retaliatory tariffs weighed on exports.
The annual deficit in goods and services increased by $68.8 billion, or 12.5 percent, Commerce Department data showed Wednesday.
The December gap jumped from the prior month to $59.8 billion, also a 10-year high and wider than the median estimate of economists. The merchandise-trade deficit with China — the principal target of Trump’s trade war — hit a record $419.2 billion in 2018.
The Wall Street Journal reports:
Excluding services that the U.S. sells to foreigners, such as tourism, intellectual property and banking, the deficit grew 10% to $891.25 billion, the largest level on record.
Economists say the shortfall was fueled, ironically, by another Trump administration policy: tax cuts and spending increases that juiced demand from U.S. consumers and businesses at a time when growth in the rest of the world was slowing.
U.S. registers the largest trade deficit in goods in its history, growing by 10% to $891.25 billion in 2018 https://t.co/ZdaAuk2C5n
— The Wall Street Journal (@WSJ) March 6, 2019
— Bloomberg (@business) March 6, 2019
Breaking: U.S. posted record-breaking $891.2 billion merchandise trade deficit in 2018, despite Trump’s ‘America First’ policies https://t.co/yFp7K5n0cW
— The Washington Post (@washingtonpost) March 6, 2019
Trump has recently been boasting about the one month that the trade deficit briefly dropped, November, claiming that this shows the success of his policies. https://t.co/UTt6iZTlHg
— Daniel Dale (@ddale8) March 6, 2019