U.S. trade deficit grows by more than $100 billion under Trump

U.S. trade deficit grows by more than $100 billion under Trump

U.S. trade deficit grows by more than $100 billion under Trump

President Trump's goal of reducing the trade deficit has been undercut, in part, by the stimulative effect of his biggest policy achievement to date, tax cuts, paired with a continued rise in federal government spending. Steel- and aluminum-consuming businesses have been hit particularly hard by the higher prices created by tariffs. The trade gap reached the largest total since 2008, when it was 708.7 billion dollars.

Tariffs aside, the Trump administration has finalized just one new trade deal, with South Korea.

In a 2016 campaign speech in Pennsylvania, Trump called the trade deficit a "politician-made disaster" and promised swift change.

A paper published on Saturday by economists from the Federal Reserve Bank of New York, Princeton University and Columbia University found that tariff revenue collected by the USA is "insufficient to compensate the losses being born by the consumers of imports".

More work remains on a deal that will ensure that Beijing will follow through on its commitments, US Trade Representative Robert Lighthizer told Congress last week. "Unacceptable. We are going to start whittling that down and as fast as possible".

While speaking to reporters at the White House Tuesday evening, economic adviser Larry Kudlow said the most recent talks in Washington had "great success".

Days later, Trump warned he can still walk out on China as he did with North Korean leader Kim Jong-un at their summit over a nuclear deal in Vietnam.

Arrested Huawei CFO Meng Wanzhou suing Canada
Meng will next appear in a Vancouver court on March 6 to schedule the date of the hearing, the department said. They say: "An extradition hearing is not a trial nor does it render a verdict of guilt or innocence".

There are competing forces inside the Trump administration that are debating how wise it would be to lift the duties on the first day of a deal because keeping some of the tariffs in place would allow the USA to maintain leverage.

Still, tariffs so far have proven to be a blunt weapon. "Right now, that's what we're looking at - there are never any guarantees, but I'm an optimist on it".

Economists don't like to dwell too much on the USA trade balance. Data from December 2018 was released Wednesday.

The study by Goldberg, Pablo Fajgelbaum of UCLA, Patrick Kennedy of the University of California, Berkeley, and Amit Khandelwal of Columbia also found that consumers and USA companies were paying most of the costs of the tariffs.

A second study by four economists from the University of California, Los Angeles; Yale University, the University of California, Berkeley; and Columbia University reached the same conclusion.

Trump's tariffs also may cause U.S. companies to write off sizable investments in their Chinese factories as they scramble to shift operations to safer venues, said the study by Weinstein, Amiti and Redding. Summers, along with other economists, has also challenged Trump's approach to addressing the perceived problem by adding tariffs, pointing out that these levies primarily negatively affect US consumers. We had to dust them off.

"The costs of the trade war are quite large relative to optimistic estimates of any gains that are likely to be achieved", wrote the trio of economists.

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