The US trade gap with China has hit a record level, in a blow to president Trump’s America First policies
More reaction to the US trade figures:
America’s widening trade gap is likely to drag economic growth down in 2019, predicts Andrew Hunter of Capital Economics.
He writes:
Last year Donald Trump imposed tariffs on $250bn of Chinese imports in an attempt to close the US trade gap. He also brought in levies on steel and aluminium from around the world, plus tariffs on some goods from Europe.
So the $621bn question is… why did the trade deficit get bigger?!
One key factor is that Trump also stimulated the US economy by cutting taxes, giving consumers and businesses more money to spend.
Inevitably, some of that money went on imports from abroad – especially as the US dollar has strengthened, giving Americans more purchasing power. That creates a wider trade gap.
That strong dollar also makes it harder for US companies to sell goods abroad.
Another factor: it takes time to construct factories so that goods made in China can be made in the US instead.
