Trump said he’d shrink the trade deficit with China… It just hit a record high

Trump said he’d shrink the trade deficit with China... It just hit a record high. www.businessmanagement.news

The trade deficit with China hit a record high in 2017, defying President Trump’s repeated promises to shrink a number that he regards as a test of whether other nations are treating the United States fairly.

U.S. purchases of Chinese goods and services last year were $375 billion greater than Chinese orders from the United States, the Commerce Department said Tuesday.

Release of the new trade figures came one week after the president boasted in his State of the Union address that the United States had “finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs and our nation’s wealth.”

Union leaders who cheered the president’s promise to restore lost manufacturing jobs seized on the Commerce Department report as evidence that tougher action is required.

 “As a candidate, the president promised to reduce the trade deficit, end China’s cheating, stop unfair trade in steel and aluminum, and reverse the tide of lost jobs due to trade,” said Leo Gerard, president of United Steelworkers. “Despite many promises, workers are still waiting for a new approach.”

The overall U.S. trade deficit in goods and services with the rest of the world climbed to $566 billion last year, a 12.1 percent increase over the previous year and the highest in nine years.

“This is the widest now since the recession,” said economist Chris Rupkey of MUFG Union Bank. “Worse than Obama’s second term in office. Trump’s trade team has not been able to stem the flood of imports into the country yet.”

Some trade experts worry that more aggressive U.S. measures will ignite a tit-for-tat cycle of retaliation.

“They raise the already high risk of new U.S. tariffs on Chinese imports, almost certainly to be quickly followed by a carefully targeted Chinese response,” said economist Mary Lovely of the Peterson Institute for International Economics. “Unfortunately, while destructive of jobs both here and in China, these responses will not move the needle on the U.S. trade deficit.”