Trade Deficit Hits 10-Year High Despite Trump’s Claim He Would Fix It
The U.S. trade deficit has hit a 10-year high, according to a report released by the Commerce Department. The news comes despite claims from President Trump that the country would have “brilliant trade” policies designed to drop the national trade deficit “like you’ve never seen before.”
The deficit hit $55.5 billion in October, according to Reuters. The number is almost a billion dollars higher since September. The gap has been widening for the past five months.
One driver of the deficit has been the politically sensitive good trade deficit with China, which soared to $43.1 billion in October. That record number is the result of the bitter trade war between the two countries.
President Trump ordered new tariffs on $250 billion worth of Chinese imports this past year. The tariffs include steel and aluminum imports. China responded with import tariffs on U.S. goods, including soybeans. While the two leaders agreed to a 90-day cease-fire on more tariffs, the trade war appears to still be going strong.
U.S. economist Jake McRobie told Reuters on Wednesday, “We remain skeptical of a substantial trade deal.”
The trade deal is also less likely with the arrest of the CFO of Huawei Technologies over the weekend. Meng Wanzhou, whose father founded the Chinese tech company, was arrested in Canada for extradition to the United States.
The trade war has caused uncertainty that Trump can fulfill his promise to balance out trade with China. During a 2015 campaign rally, Trump told supporters:
In China, think of this, we have a trade imbalance of almost $400 billion a year. Can you imagine if we could straighten it out? Could you imagine if I could get that down to, and I promise I’ll do better than this, but could you imagine if I could get it down to $100 billion a year in losses?”
Instead of going down, it looks like President Trump is causing the U.S. deficit to grow.