President Trump loves to declare that he is “winning” the trade wars. But evidence is coming in hard and fast that disputes that. Trump made reducing the deficit a major goal for his yearlong trade war but despite his efforts, the deficit in goods and services hit $621 billion in 2018, up $69 billion from the previous year, and at the largest since 2008.
Trump imposed tariffs on steel, aluminum, and Chinese goods but a high US demand for imports, which increased by $218 billion to $3.12 trillion this year did it’s part to drive the deficit up higher. While US import demand saw significant growth and climbing faster each year, US exports only increased by $149 billion to just $2.5 trillion.
Two separate papers by the nation’s leading economists came out over the weekend and they declared the Trump trade experiments to be the most consequential since the 1930 Smoot-Hawley tariffs, which was blamed for worsening the Great Depression. They also say that the cost of this- BILLIONS- is being largely put upon American consumers.
One of Trump’s main focuses is goods, and in goods alone the trade deficit grew by $83.8 billion, to $891 billion. Conversely, the US held its $270 billion surplus in services, which was up $15 billion from 2017.
Trump’s trade war has a huge bull’s eye on China and it turns out that the deficit with China ALSO increased significantly this past year as well. According to the Census Bureau, the goods trade deficit with China rose to $419 billion last year, which was an increase of $44 billion while imports climbed to $540 billion and exports DROPPED to $120 billion.
In anticipation of major tariffs, which would drive up imports, many US companies elected to hurry in goods that were subject to those tariffs. Meanwhile, with counter-tariffs on the rise throughout the world, we saw a marked decline in US exports.