Trade Deficit Hits New High, Trump Tariffs Are Bad


1. US Trade Deficit Hit Record $891 Billion in 2018
2. Trump’s Trade Tariffs Are a Tax on US Consumers
3. US-China Trade Negotiations Hit a Bump Last Week
4. Another Reason to Consider Our Alpha Advantage Strategy


The US trade deficit soared to a new record high in 2018 according to the latest Commerce Department report out last week. President Trump has promised that his trade tariffs on China and other trading partners would reduce the trade deficit. They have only made it worse.

Today, I’ll offer more evidence that trade tariffs are not paid by our trading partners, but instead result in higher prices for US consumers. This is not good for the US economy and the stock markets. Stocks have turned decidedly lower in recent days as talks of a new trade deal with China deteriorated.

US Trade Deficit Hit Record $891 Billion in 2018

The trade deficit/surplus is the difference between how much we import versus how much we export. The US, as the largest economy in the world, has imported more than we export for years. That’s absolutely normal for the richest nation on the planet, but the mainstream media always paints trade deficits as a bad thing. Here are the latest numbers.

The Commerce Department reported last week that the US trade deficit in goods swelled to a new all-time high of $891.3 billion in 2018, defying President Trump’s efforts to narrow the gap. Imports jumped due to the strong economy, and some exports – including soybeans and other farm products – got hammered by retaliation against US trade policies.

The trade picture looked somewhat less dire when services – including tourism, higher education, banking and others – are counted, though this deficit still deteriorated markedly. With services included, the overall trade gap grew 12% last year to $621 billion, the widest since 2008. US trade deficits with China and Mexico, already the nation’s largest, also reached new records last year.

US International Trade DeficitTotal US goods exports to China fell 7% last year to $120.3 billion, but American imports of Chinese merchandise rose by that same percentage, to $539.5 billion.

Separate data from China’s customs administration provide part of the explanation. Chinese purchases of US soybeans – one of America’s top exports, which were targeted by China’s retaliatory tariffs – fell by nearly half last year to $7.1 billion from $13.9 billion in 2017. The US loss was Brazil’s gain, as that country’s soybean exports jumped by $8 billion.