The US trade deficit rose in January to the highest level since October 2008, defying President Donald Trump’s efforts to bring more balance to America’s trade with the rest of the world.
The commerce department said Wednesday that the trade deficit rose to $56.6 billion in January, up 5% from $53.9 billion in December and the highest since October 2008’s $60.2 billion trade gap. The trade deficit—the gap between what America sells and what it buys abroad—has risen for five straight months, AP reported.
Trump rattled financial markets last week by promising to slap big tariffs on imported steel and aluminum. He blames persistent deficits on abusive practices by US trading partners and on bad trade deals that put American companies at a disadvantage or encourage them to move factories overseas.
Exports fell 1.3% to $200.9 billion in January, and imports were flat at $257.5 billion.
The United States ran a $76.5 billion deficit in the trade of goods, which was partially offset by a $19.9 billion surplus in services such as education and banking. The $36 billion January deficit with China was the highest since September 2015. The trade gap with Mexico narrowed to $4.1 billion from $5.4 billion in December.
Trump upset America’s allies last week by vowing to slap tariffs of 25% on imported steel and 10% on aluminum. Europe has threatened to retaliate with sanctions on US exports of blue jeans, cosmetics, Harley-Davidson motorcycles and range of other items, raising the risk of a potentially destructive trade war.
Trump is also demanding a rewrite of the 1994 North American Free Trade Agreement with Mexico and Canada in an attempt to reduce the US trade deficit with Mexico and to shift more auto production north of the border.
The trade gap has continued to rise since Trump entered the White House partly because the US economy is strong and American consumers have an appetite for imported products and the confidence to buy them.
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