Please ensure Javascript is enabled for purposes of website accessibility
In a Blow to Trump, America’s Trade Deficit Hit Record $891 Billion
Bill McEwen updated website photo 2024
By Bill McEwen, News Director
Published 6 years ago on
March 6, 2019

Share

By Jim Tankersley and Ana Swanson

WASHINGTON — America’s trade deficit with the rest of the world rose to its highest level in history last year as the United States imported more goods than ever, including a record amount from China, ballooning the deficit to $891.3 billion and delivering a setback to President Donald Trump’s goal of narrowing that gap.

The trade deficit is the difference between how much a country sells to its trading partners and how much it buys.

The increase was driven by some factors outside Trump’s control, like a global economic slowdown and the relative strength of the U.S. dollar, both of which weakened overseas demand for U.S. goods. But the widening gap was also exacerbated by Trump’s $1.5 trillion tax cut, which has been largely financed by government borrowing, and the trade war he escalated last year.

The trade deficit is the difference between how much a country sells to its trading partners and how much it buys. Trump has long boasted that his trade policies would reduce that gap, which he views as a measure of whether partners like China and the European Union are taking advantage of the United States, a diagnosis that few economists share.

Instead, in a year when Trump imposed tariffs on steel, aluminum, washing machines, solar panels and a variety of Chinese goods, the trade deficit grew by 12.5 percent from 2017, or nearly $70 billion, the Commerce Department said Wednesday.

In December, the overall goods and services deficit rose to $59.8 billion, up 19 percent from the previous month. It was the highest monthly trade deficit in a decade.

The Widening Gap Is Partly the Result of Trump’s Trade War

The United States also imported a record amount of goods from China last year, despite Trump’s trade war with China and the imposition of tariffs on $250 billion worth of Chinese goods. The trade gap in goods between the United States and China hit $419 billion in 2018, deepening a bilateral deficit that has been a particular source of anger for Trump.

The widening gap is partly the result of Trump’s trade war with Beijing, which has slowed American exports to China. Those exports declined by nearly 50 percent in December, compared to the same month a year before, as American companies were hurt by a slowdown in the Chinese economy and retaliatory measures that Beijing has leveled on U.S. goods. A stronger American dollar, which makes United States products more expensive overseas, and a weaker Chinese yuan also offset some of the impact of Trump’s tariffs.

Trump views the trade deficit with China as a sort of economic scorecard for which country is on top. Most economists disagree with this perspective, viewing trade deficits as not a sign of either economic strength nor weakness, but a function of macroeconomic factors like investment flows, fluctuations in the value of currency and relative growth rates.

As the trade deficit widens, Trump’s focus on it has resulted in a particular irony: By his own metric, the president is failing to right America’s global trading relationships. Yet many of the president’s critics don’t blame him for this, saying some fluctuations in the trade deficit are largely beyond his control.

Several global economic factors explain the widening of the global trade deficit last year. China’s slowdown has reduced consumer appetite for U.S. goods, as has slowing growth in Europe. The strength of the dollar in global currency markets has made it cheaper for American consumers to buy foreign-made goods, and more difficult for foreign customers to buy U.S.-made ones.

The value of the Chinese yuan, which is determined partly by the market and partly by the government, weakened against the dollar last year and started rising again in the fall, as Chinese President Xi Jinping met Trump in Argentina in November to begin hammering out a trade pact, said Brad Setser, a senior fellow for international economics at the Council on Foreign Relations.

Tax Cuts Helped Americans Buy More Imported Goods

“China certainly allowed the market to push the value of the yuan down against the dollar over the summer,” Setser said.

“China certainly allowed the market to push the value of the yuan down against the dollar over the summer.” — Brad Setser, a senior fellow for international economics at the Council on Foreign Relations

The relative strength of the U.S. economy is also a large factor in the widening deficit, along with the $1.5 trillion tax cut Trump signed in 2017, which helped boost growth last year.

Money from the tax cuts helped Americans buy more imported goods than ever before in 2018. And to finance the tax cuts, the government needed to borrow more dollars, some of which came from foreign investors. Foreigners primarily get those dollars by selling more goods and services to Americans, which will necessarily widen the trade gap, an effect that many economists predicted at the time Trump signed the tax cuts.

The cuts are also helping to swell the federal budget deficit, which Trump similarly pledged to reduce — and, in fact, eliminate — as a candidate. On Tuesday, Treasury Department figures showed the budget deficit widening, and is on track to top $1 trillion this fiscal year. Revenue from personal and corporate income taxes was down by 9 percent in January, compared to the same month a year ago.

As with the trade deficit, many economists are growing less alarmed by the budget deficit. However, Federal Reserve officials and some economists warn federal borrowing is on an unsustainable path and will ultimately hurt the U.S. economy. The Fed chairman, Jerome Powell, warned lawmakers at a House hearing last week that the federal debt was on an “unsustainable” path.

Powell was asked during the hearing if he would also say that the trade deficit was unsustainable. “I don’t think I would say that,” he replied.

© Copyright The New York Times News Service, 2019

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Fresno County’s New Breeding Ordinance Could Shut Down 50 Operations

DON'T MISS

NATO Leaders Set to Back Trump Defense Spending Goal at Hague Summit

DON'T MISS

Fresno County Wildfire Quickly Contained. How Did They Do It?

DON'T MISS

Lender’s Intervention Halts City of Fresno’s Eviction Attempt at Granite Park

DON'T MISS

Clovis Unified Faces Lawsuit Alleging Years of Neglect and Sexual Abuse at Fancher Creek

DON'T MISS

Suspect in Bombing at California Fertility Clinic Dies in Federal Custody

DON'T MISS

US Airstrikes Failed to Destroy Iran’s Nuclear Sites, Sources Say

DON'T MISS

Stephen Miller Expands Power in Second Trump Term, Defies Legal Limits

DON'T MISS

FTA Unloads on Fresno Unified After Skipping External Search for Chief Academic Officer

DON'T MISS

Fresno Man Dies After Alleyway Attack. Police Investigating

UP NEXT

Clovis Man Sentenced to 8 Years in Federal Prison in Deadly Fentanyl Case

UP NEXT

California Politicians Ignore Ag’s Troubles, but Boost Movie Business

UP NEXT

Victims Identified as Death Toll Climbs to 8 in Lake Tahoe Boating Tragedy

UP NEXT

Wall Street Indexes Climb After Israel-Iran Ceasefire

UP NEXT

Dollar Drops After Cease Fire Announcement

UP NEXT

Powell Repeats Rate Cuts Can Wait as Fed Studies Tariff Impacts

UP NEXT

US Crude Oil Futures Fall Over $3 as Trump Announces Israel-Iran Ceasefire

UP NEXT

Florida to Build ‘Alligator Alcatraz’ Detention Center for Migrants in Everglades

UP NEXT

Oil Falls 6% as Iran Focuses Retaliation on US Military Base

UP NEXT

Americans Worry Conflict With Iran Could Escalate, Reuters/Ipsos Poll Finds

Bill McEwen,
News Director
Bill McEwen is news director and columnist for GV Wire. He joined GV Wire in August 2017 after 37 years at The Fresno Bee. With The Bee, he served as Opinion Editor, City Hall reporter, Metro columnist, sports columnist and sports editor through the years. His work has been frequently honored by the California Newspapers Publishers Association, including authoring first-place editorials in 2015 and 2016. Bill and his wife, Karen, are proud parents of two adult sons, and they have two grandsons. You can contact Bill at 559-492-4031 or at Send an Email

Lender’s Intervention Halts City of Fresno’s Eviction Attempt at Granite Park

3 hours ago

Clovis Unified Faces Lawsuit Alleging Years of Neglect and Sexual Abuse at Fancher Creek

3 hours ago

Suspect in Bombing at California Fertility Clinic Dies in Federal Custody

4 hours ago

US Airstrikes Failed to Destroy Iran’s Nuclear Sites, Sources Say

4 hours ago

Stephen Miller Expands Power in Second Trump Term, Defies Legal Limits

4 hours ago

FTA Unloads on Fresno Unified After Skipping External Search for Chief Academic Officer

4 hours ago

Fresno Man Dies After Alleyway Attack. Police Investigating

5 hours ago

Poll: Most Californians Prefer Lower Taxes and Fewer Services, Skeptical of Gov’t Spending

5 hours ago

Suspect Identified in Fresno Parking Lot Murder

5 hours ago

Nasdaq 100 Notches First Record High Close Since February

5 hours ago

Fresno County’s New Breeding Ordinance Could Shut Down 50 Operations

Saying they already have a list of 50 known pet breeders, Fresno Humane Animal Services representatives said a new county ordinance will all...

2 hours ago

2 hours ago

Fresno County’s New Breeding Ordinance Could Shut Down 50 Operations

President Donald Trump arrives at a dinner for NATO heads of state and governments hosted by Dutch King Willem-Alexander and Dutch Queen Maxima, on the sidelines of a NATO Summit, at Huis ten Bosch Palace in The Hague, Netherlands June 24, 2025. (Reuters/Toby Melville)
2 hours ago

NATO Leaders Set to Back Trump Defense Spending Goal at Hague Summit

A 180-acre wildfire in Cantua Creek was fully contained Tuesday afternoon, with CalFire crediting nearby roads for helping crews quickly stop the Monterey Fire from spreading. (CalFire)
2 hours ago

Fresno County Wildfire Quickly Contained. How Did They Do It?

3 hours ago

Lender’s Intervention Halts City of Fresno’s Eviction Attempt at Granite Park

3 hours ago

Clovis Unified Faces Lawsuit Alleging Years of Neglect and Sexual Abuse at Fancher Creek

California Fertility Clinic Bombing Investigation
4 hours ago

Suspect in Bombing at California Fertility Clinic Dies in Federal Custody

A missile launched from Iran towards Israel is seen from Tubas, amid the Iran-Israel conflict, in the Israeli-occupied West Bank, June 24, 2025. REUTERS/Raneen Sawafta
4 hours ago

US Airstrikes Failed to Destroy Iran’s Nuclear Sites, Sources Say

Stephen Miller has emerged as a powerful and controversial force in Trump’s second term, driving aggressive immigration policies and defying legal boundaries while expanding his influence across the administration. (Shutterstock)
4 hours ago

Stephen Miller Expands Power in Second Trump Term, Defies Legal Limits

Help continue the work that gets you the news that matters most.

Search

Send this to a friend