Finance

US trade deficit rises on record imports from China

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Record imports from China helped drive up the U.S. trade deficit 8.6 percent in October as retailers stocked up for the holidays, the Commerce Department reported Tuesday.

Goods and services coming into the U.S. from China, Mexico and the European Union all hit record levels, which boosted the trade gap to $48.7 billion from $44.9 billion in September. It’s the highest monthly trade deficit recorded since President Trump took office.

{mosads}Imports hit a record $244.6 billion in October on growing U.S. demand amid an improving economy, while exports were unchanged from September, at $195.9 billion. 

Goods and services from China totaled $48.2 billion, while EU imports amounted to $39.4 billion and imports from Mexico grew to $28.7 billion, which are all record highs.

“We have trade deficits with everybody,” Trump said on Tuesday ahead of a lunch with Republicans urging the U.S. to remain in NAFTA. 

“Virtually every country in the world we have trade deficits with. And that’s going to be changing —it’s already changing — but it’s going to be changing fast,” he said.

The Trump administration has focused its trade policy on efforts to lower the trade deficit, arguing that the United States has been treated unfairly in trade deals such as the North American Free Trade Agreement (NAFTA).

But trade deficits this year — which have reached $462.9 billion and are up 11.9 percent from last year — are on track to eclipse 2016 levels and will likely climb to more than $500 billion by year’s end.

Trump, who has been highly critical of the U.S. trade deficit with China, lamented the numbers on Tuesday. He said the US has a trade deficit with virtually every country in the world.

“We have tremendous losses with Mexico and tremendous losses with Canada,” he said.

The U.S. Chamber of Commerce said in a May report that they disagree “with the contention that the goods trade deficit is an appropriate gauge of whether a particular set of trade policies — or trade agreements — is delivering benefits to the American people more broadly.”

The reason for the deficit is that “Americans are spending more than they produce.”

“The overall trade deficit is the result of the saving and investment decisions of U.S. households and businesses,” the report said.

Exports also hit several high points, with exports to Mexico ($22.1 billion) and Brazil hitting the highest levels since October 2014.

Meanwhile, exports to China, $13 billion, were the highest since December 2013.

Trump has in the past blamed previous U.S. administrations for failing to crack down on China amid widening trade gaps.

“After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens,” Trump said while standing next to Chinese President Xi Jinping during his recent trip through Asia.

“I give China great credit, but in actuality I do blame past administrations for allowing this out-of-control trade deficit to take place,” Trump said.

During his five-nation tour across Asia, the president promoted business deals in Japan, South Korea and China as ways to help lower trade deficits with major trading partners across the Pacific Rim.

On Tuesday, Trump, senior administration officials and U.S. Trade Representative Robert Lighthizer had  a lunch meeting with Republican Sens. Lamar Alexander (Tenn.), Joni Ernst (Iowa), Deb Fischer (Neb.), Jeff Flake (Ariz.), Cory Gardner (Colo.) and Lindsey Graham (S.C.) to discuss trade.

The group of senators requested the meeting to discuss trade priorities, especially the future of NAFTA.

“We’re going to look at NAFTA very seriously,” Trump said. “It’s going to very successful.”

– This story was updated at 2 p.m. and 3:04 p.m.

Tags Balance of trade Cory Gardner Deb Fischer Donald Trump Foreign trade of the United States Jeff Flake Joni Ernst Lamar Alexander Lindsey Graham North American Free Trade Agreement Robert Lighthizer

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