US Trade Deficit Is Wider Than Any Month or Year Since 2008

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The trade gap widened in December, growing 5.3 percent to $53.1 billion.

The U.S. trade deficit widened more than expected in December, hitting its highest level since 2008 as robust domestic demand pushed imports to a record high.

Trade deficit in goods with China, Mexico and Canada, which account for more than half of total USA goods imports and exports, all widened in 2017, compared with the prior year, said the Commerce Department. Trump has promised to reduce the deficits with China and Mexico, and the administration is renegotiating the North American Free Trade Agreement with Canada and Mexico and is considering imposing trade sanctions on China. "For 2017, the goods and services deficit increased $61.2 billion, or 12.1 percent, from 2016", the Bureau of Economic Analysis and the Census Bureau said in their monthly report for December, which includes year-end totals.

December was also the highest month on record for USA goods exports to China at $13.7 billion and to Japan, at $6.4 billion.

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At the same time, the United States recorded a record level of exports to 29 countries, including Mexico (243 billion), China (130.4 billion) and the United Kingdom (56.3 billion).

For the full year, total USA exports rose 5.5 percent to $2.33 trillion, while imports climbed 6.7 percent to a record $2.9 trillion. The president recently placed tariffs on imported solar panels and washing machines, sparking concern the USA may prompt trade wars. Imports, however, rose by more: 2.5 percent to $256.5 billion. Imports from China and Mexico hit record highs The year 2017 saw the US importing more foreign-made cars, computers, cell phones and other consumer goods, much of which were produced in China. Greater prosperity tends to result in increased consumer spending, often on foreign imports.

Economists said the rise in the USA trade deficit was mainly the result of higher demand from consumers and companies, showing that the USA economy gathered speed in 2017.

The jump in the so-called real trade deficit at the end of the year puts trade on course to be a drag on gross domestic product in the first quarter.