In January, the American trade deficit inched up to a more than nine-year maximum, with the shortfall with China extending abruptly, hinting that President Donald Trump’s “America First” trade stance won’t probably affect the US deficit.
On Wednesday, the Commerce Department revealed that the trade gap headed north 5% reaching $56.6 billion. It appeared to be the highest value since October 2008, following a moderately upwardly updated $53.9 billion dive in December.
Financial analysts surveyed by Reuters had predicted the trade gap extending to about $55.1 billion in January versus a previously posted $53.1 billion in December.
The politically fragile trade deficit with China tacked on 16.7% hitting 36.0 billion, which appears to be the most impressive result since September 2015. As for the deficit with Canada, it demonstrated the highest outcome for the last three years.
The trade deficit keeps widening a year into the term of Donald Trump. Previously, he had told that his country was being taken advantage of by its quick-witted trading partners. As a result, in January Trump imposed heavy duties on imported solar panels as well as large washing machines.
The previous week Trump informed that he would impose import duties of 25% on steel along with 10% on aluminum for the purpose of protecting domestic manufacturers. While these actions might be generally appreciated by Trump’s working class electoral base, in particular in states heavily affected by factory closures as well as import competition, market experts warn they could suppress economic growth.
Such fierce protectionist measures have generated fears of a trade conflict and could endanger negotiations on the North American Free Trade Agreement, which links Mexico, Canada and the United States. The US President initiated a renegotiation of the controversial trade agreement with the aim of offering terms more beneficial to the United States.