Despite efforts by the White House toreduce the trade deficit and ensure fairer relationships with both the EU and China, the latest figures show that the imbalance is increasing. Official numbersfor October are now in, and it appears that the nation is heading towards arecord deficit for the year.
President Trump introduced sweeping tariffs on steel and aluminum earlier this year, as well as further tariffs on a range of Chinese goods. While these tariffs were part of a wider negotiating strategy, they were also intended, in part, to reduce the immediate deficit.
The figures show that there is still work to be done, which will leave some people questioning just how much progress theWhite House has made in its battle to bring America a fairer deal.
Goodsand Service Trade Deficit Increases by 11%
The goods and services deficit in October reached $55.5 billion. This is a total increase of 11%, according to a report released by the Commerce Department on Thursday.
Soybeans are having a significant impact,as China has ceased almost all purchases from the United States. Exportsdropped 47% between September and October, losing $800 million for the USagriculture industry in that time. After recent talks with Donald Trump, Chinese President Xi Jinping has indicated that his country may beginpurchasing soybeans and other agricultural products again, however, thisdepends on the success of upcoming high-level talks, and there is no formaldeal in place at this time.
Retaliatory tariffs from China have causeddamages that are in no way trivial. According to The Farm Bureau, Nebraskafarmers have lost $1 billion of produce sales and wages. Lost income has aknock-on effect with local economies. The same situation can be seen in other farming States.
Gap This Year Likely to Be the Highest in Decade
The current figures are leading towards thehighest annual deficit recorded in ten years. The situation is extremelyironic, considering that the slew of tariffs this year have contributed to the current trade deficit.
President Trump has agreed to hold any newtariffs for 90 days, allowing US and Chinese officials to work together on arenewed bilateral trade agreement. Investors, consumers and economists throughout America are waiting anxiously to see a new chapter of international trade, where there is more stability and progress towards trade parity.