In a blow to Trump, America’s trade deficit hit record US$891b

Significantly, the trade deficit with China hit a record $419 billion, despite a series of tariffs the administration imposed on Chinese goods to decrease reliance on imports. It's reported that both sides are close to reaching a deal that could include China's purchase of more than $100 billion worth of US goods every year, including agricultural and energy products.

The retaliatory tariffs Trump provoked from China also hit major U.S. agricultural exports such as soybeans: shipments of that item fell $US4 billion previous year.

Economists said activity from cash-fluid businesses and consumers helped increase the buying of imports while the overvalued dollar weighed on exports. You can't wish it away. U.S. and Chinese officials have recently signalled that they are close to some kind of agreement, although China has only bolstered its commitment to investing in and developing its technology sector and questions about how to enforce any trade rules remain.

The record $891 billion deficit shattered the previous high of $838.3 in 2006, a time when the USA housing market was near its peak.

While that reserve currency status does handicap the competitiveness of U.S. exports, it lowers borrowing costs for United States borrowers and enables Americans to enjoy a higher standard of living than they would if there were no trade deficits.

The OECD on Wednesday cut its global growth forecast for 2019 by two tenths to 3.3 percent, citing trade tensions and political uncertainty.

Cellphone imports increased $0.6 billion.

Inside the White House, key economic advisers including Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow are eager for a quick resolution to the trade conflict, while trade hawks such as U.S. Trade Representative Robert Lighthizer has taken a tougher line with China.


But most economists say that such increased Chinese purchases would likely only divert USA shipments from other foreign customers, shrinking the trade gap with China but leaving the global balance largely unchanged.

Put another way, by Trump's own benchmark, the United States is 20% worse off than it was at the end of 2016, just before he took office.

The Fed said slowing global growth and the government shutdown weighed on the U.S. economy at the start of the year but that it continued to grow. Moreover, Trump pulled the US out of the longstanding trilateral North American Free Trade Agreement, which came into force in 1994 to unify the US, Canada, and Mexico. Beijing is expected to offer to make eye-catching purchases of American agricultural goods to cut the trade deficit and please Trump.

"We compute that tradeable real wages fall the most in heavily GOP counties because of the [trade] war", the study found.

Weinstein said the President appears to be relying on a 2018 analysis of data from the 1990s, when the USA represented a larger share of the global economy and enjoyed more leverage over exporters in other countries.

Trump's tariffs also may cause USA 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.

Another is that other countries have levied their own retaliatory tariffs on our own products - most famously, red-state goods such as soybeans and bourbon.

Washington and Beijing have been locked in intense negotiations to end a months-long trade war.


Popular
  • Raging fire guts hundreds of cars at government-run Indian airshow

    Raging fire guts hundreds of cars at government-run Indian airshow

    The official informed that the spread of fire was controlled by creating a gap by removing adjacent cars. Additionally six CFTs (crash fire tenders) were also moved to the site within 10 minutes into the fire.
    Pope Francis leads conference on sex abuse at Vatican

    Pope Francis leads conference on sex abuse at Vatican

    Another survivor from Chile said the church's leaders had discredited victims and protected the priests who abused them. Many advocates say the Church must let civil authorities investigate and prosecute priests who molest or rape children.
    Chelsea can not  afford Malmo mistake against top sides, says Sarri

    Chelsea can not afford Malmo mistake against top sides, says Sarri

    Madrid defender Dani Carvajal was suspended for two games last season after intentionally earning a booking in the group stages. All yellow cards and pending suspensions expire after the quarter-finals and can not be carried forward to the semis.
  • Imran Khan offers talks again with India, says better sense should prevail

    An Indian military statement said that "out of anger and frustration", Pakistan initiated an "unprovoked cease-fire violation". A third video shows the IAF pilot sipping a cup of tea and saying that he was being treated well by Pakistani officials.
    Cost of Washington’s measles outbreak tops $1 million; expected to climb higher

    Cost of Washington’s measles outbreak tops $1 million; expected to climb higher

    Unvaccinated children aged 5 and below are at highest risk of the disease, Health Undersecretary Eric Domingo earlier said. Healthcare providers and travel clinics all over BC are now accepting patients who are requesting the measles vaccination.
    Priyanka Chopra, Amal Clooney attend Meghan Markle’s baby shower?

    Priyanka Chopra, Amal Clooney attend Meghan Markle’s baby shower?

    Earlier in the day, Meghan had a baby shower with some of her close friends , including former Suits co-star Abigail Spencer . She was also showered with baby gifts for her little one, as guests were seen arriving with bags of presents.
  • Fans 'won't force Gareth Bale out' of Real Madrid, vows agent

    Fans 'won't force Gareth Bale out' of Real Madrid, vows agent

    But Barnett rubbished such reports and insists Bale is intending to stay beyond the summer and not look for a move away. Frankly they should be ashamed of themselves, ” the agent told Sky Sports News .
    Wallace: Trump Made 'Completely Unforced Error' With Remark About Otto Warmbier

    Wallace: Trump Made 'Completely Unforced Error' With Remark About Otto Warmbier

    In exchange for undoing its nuclear arsenal, Trump is pitching a vision of North Korea as a new Asian economic powerhouse. Those unspecified USA measures appear to have been complete sanctions relief, which Mr Trump would not offer.
    Trump delivers remarks on Venezuela in Miami

    Trump delivers remarks on Venezuela in Miami

    The shipments have been meant in part to dramatize hyperinflation and shortages of food and medicine gripping Venezuela. The position, in large part, is due to US sanctions against state-owned oil giant Petroleos de Venezuela SA.
  • 'Game of Thrones': HBO releases trailer for final season

    'Game of Thrones': HBO releases trailer for final season

    Director David Nutter - responsible for three episodes of the final season - added: "The fans will not be let down". When? Just when the Night King and his undead hordes are passing through having broken down the Wall last season .
    News Channels Run Old Video as Actual Footage of IAF Air Strikes

    News Channels Run Old Video as Actual Footage of IAF Air Strikes

    Secondary reports citing unnamed official Indian sources have noted that targets outside of the camp at Balakot were targeted too. The militant groups are fighting for either Kashmir's independence or its merger with Pakistan.
    Train possibly taking Kim to summit enters China

    Train possibly taking Kim to summit enters China

    Rail travel is a family tradition that was started by Kim's grandfather, the North's founder Kim Il Sung. North Korea's state media has yet to confirm either Kim's trip to Vietnam or his summit with Trump.

CONNECT