PortandTerminal.com, September 4, 2020
Despite bloody trade wars and a renegotiation of NAFTA with Canada and Mexico, America’s trade deficits remain stubbornly high.
WASHINGTON – After narrowing in the early months of the year due to coronavirus shutdowns, the gap between what the United States buys from the rest of the world and what it sells widened to its highest level since 2008, as imports jumped by a record amount in July.
We are busy for the rest of the month. It’s an unusual amount of cargo for how bad the economy is. Los Angeles (cargo) numbers should be really big.Crane operator at the Port of Los Angeles (Sept 3, 2020)
The U.S. trade deficit surged in July to $63.6 billion, the highest level in 12 years, as imports jumped by a record amount.
The Commerce Department reported that the July deficit was 18.9% higher than the June deficit of $53.5 billion.
It was the largest monthly deficit since July 2008 during the 2007-2009 recession.
It wasn’t supposed to be this way.
President Trump promised while campaigning in 2016 that, if elected, he would bring about a rapid and unprecedented decline in the U.S. trade deficit.
The president has long complained that the trade gap is a sign that other countries are taking advantage of the U.S. by sending more products to the U.S. than they buy from U.S. companies.
“Do not forget. We’re like the piggy bank that is being robbed. We have the cards. We have a lot of power with China,” President Donald Trump
To deliver on his promise, the president’s foreign and economic policies have been built around tariffs and import bans designed to making it harder and more expensive to import products, and try to incentivize companies to build items in America. On that point the President has delivered, initiating a number of costly trade wars with key partners.
President Trump’s trade policy though does not seem to have succeeded yet in slowing the flow of imports as these latest figures show.
The U.S. trade deficit with China ballooned 11.5 per cent to $31.6 billion in July, while the goods deficit with Mexico hit a record high of $10.6 billion.
So what comes next? More tariffs? More trade wars? That has been the go-to strategy up until now.
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