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US trade deficit rises despite Trump's tariffs

President Donald Trump's tariffs were supposed to shrink America's trade deficit, but it has instead grown f...

Posted: Nov 29, 2018 5:34 AM
Updated: Nov 29, 2018 5:34 AM

President Donald Trump's tariffs were supposed to shrink America's trade deficit, but it has instead grown for five straight months and is on track to hit a record high before the end of the year.

The monthly goods deficit grew by $1 billion in October, according to a US Census report released Wednesday.

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The Census report is one of the first measures of trade released since Trump imposed his biggest round of tariffs in September on $200 billion of Chinese goods. It put a 10% tax on goods ranging from luggage to bikes and baseball gloves. Trump has threatened to increase the rate to 25% on January 1.

The duties make it more expensive for US importers to buy those items, but Americans bought more goods from abroad in October than they did the month before. The figure may reflect stockpiling by American importers ahead of an additional hike in tariffs set to take effect in January, as well as strong consumer spending.

"There is some anecdotal evidence that US importers are likely pulling forward orders to get ahead of additional tariffs on Chinese goods, which could be one of the factors driving imports higher in recent months," said Pooja Sriram, an economist at Barclays.

Last year's federal tax cuts have also put more money back into Americans' pockets, lifting demand for imports even if they're more expensive.

"We believe that domestic demand is likely to be sufficiently robust so as to keep imports elevated even after any additional tariffs," Sriram said.

Additional data due out next week on trade of both goods and services is expected to show a 10-year high in the overall trade deficit, said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

That's the opposite of what Trump wants to achieve.

The president has pledged to reduce America's trade deficit by pursuing new trade agreements with countries he argues are engaging in unfair trade policies, especially China. He's put tariffs on $250 billion of Chinese-made goods this year in an effort to make US-made products more attractive to consumers.

"It's been such a terrible one-way street with China," Trump told the Wall Street Journal in an interview Monday.

Trump and Chinese President Xi Jinping are set to meet Saturday evening for a formal dinner on the sidelines of the G20 meeting in Argentina. It is their only scheduled meeting before the end of the year.

White House economic adviser Larry Kudlow on Tuesday dangled the possibility of a "breakthrough" at the dinner. But Trump escalated tensions earlier in the week, when he repeated a threat to put tariffs on the remaining Chinese goods if a deal can't be reached.

The Trump administration argues that China is engaging in unfair trade practices, including intellectual property theft and forced technology transfers. But the Chinese say Trump's unilateral tariffs are bullying.

American businesses and lawmakers on both sides of the aisle agree that the China trade issues should be addressed — but not everyone believes that tariffs are the right way. Some manufacturers and retailers say the duties could lead to job losses and higher prices for consumers.

"It would be hard to argue that (China) has behaved fairly in its trade practices," said Florida Democratic Rep. Stephanie Murphy this week at an S&P Global event in New York.

"But I think doing it in a multilateral way would have been a better approach," she said.

Trump has also imposed tariffs on foreign steel and aluminum this year, in the interest of national security. US steel producers have welcomed the taxes, as they've seen prices for their own products go up. Steel Dynamics, an American producer, announced this week that they would be building a new steel mill in the southwest region of the country, creating 600 new jobs.

"Steel jobs are coming back to America, just like I predicted," Trump tweeted Wednesday.

But American manufacturers that use steel, including automakers, have argued that the tariffs have made the cost of domestic production more expensive.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 314509

Reported Deaths: 7247
CountyCasesDeaths
DeSoto21626259
Hinds20359415
Harrison17934309
Rankin13634278
Jackson13447246
Madison10099217
Lee9980174
Jones8381163
Forrest7683152
Lauderdale7191241
Lowndes6401147
Lamar623086
Lafayette6200118
Washington5339134
Bolivar4802132
Oktibbeha462798
Panola4588107
Pearl River4512146
Marshall4443103
Warren4393121
Pontotoc420772
Monroe4113133
Union411076
Neshoba4031176
Lincoln3968110
Hancock379386
Leflore3497125
Sunflower336090
Tate334084
Pike3325105
Scott315973
Alcorn313368
Yazoo311669
Itawamba300477
Copiah297065
Coahoma295479
Simpson295288
Tippah288768
Adams286882
Prentiss279760
Marion269280
Leake268373
Wayne262641
Grenada261487
Covington259681
George248048
Newton246861
Winston227281
Tishomingo226967
Jasper221148
Attala214473
Chickasaw207857
Holmes189173
Clay185454
Stone182833
Tallahatchie178841
Clarke178080
Calhoun170832
Yalobusha164338
Smith162434
Walthall133945
Greene130633
Lawrence128624
Montgomery126942
Noxubee126734
Perry126338
Amite123142
Carroll121829
Webster114532
Jefferson Davis107133
Tunica105726
Claiborne102430
Benton99525
Humphreys96733
Kemper95828
Franklin83823
Quitman80916
Choctaw76418
Wilkinson67331
Jefferson65728
Sharkey50217
Issaquena1686
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Alabama Coronavirus Cases

Cases: 532895

Reported Deaths: 11001
CountyCasesDeaths
Jefferson771431528
Mobile41089808
Madison34837505
Tuscaloosa25810454
Montgomery24355588
Shelby23730249
Baldwin21191309
Lee15892171
Calhoun14522316
Morgan14324279
Etowah13861353
Marshall12250223
Houston10581281
Elmore10060205
Limestone9986151
Cullman9705194
St. Clair9702243
Lauderdale9441242
DeKalb8846187
Talladega8255176
Walker7246277
Autauga6938108
Jackson6815112
Blount6694137
Colbert6310134
Coffee5524119
Dale4850111
Russell443238
Chilton4308112
Franklin426282
Covington4136118
Tallapoosa4039152
Escambia393977
Chambers3578123
Dallas3557152
Clarke351161
Marion3130101
Pike311377
Lawrence300798
Winston275673
Bibb261564
Geneva251477
Marengo249664
Pickens234761
Barbour231756
Hale223277
Butler216469
Fayette212562
Henry189044
Cherokee184745
Randolph181742
Monroe178040
Washington167639
Macon159950
Clay156857
Crenshaw152757
Cleburne149141
Lamar142935
Lowndes139053
Wilcox127130
Bullock122841
Conecuh110629
Coosa107928
Perry107826
Sumter104832
Greene92534
Choctaw61124
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