Trump’s New Legacy: Biggest U.S. Trade Deficit In 14 Years
Despite massive tariffs imposed by President Donald Trump, the U.S. just chalked up its biggest trade deficit in 14 years.
The gap between the value of goods and services the U.S. buys compared to what it sells abroad climbed 5.9% in August to $67.1 billion. That’s the largest gap since August 2006.
Imports were up 3.2%, to $239 billion — led by purchases of crude oil, cars and auto parts — compared with exports, which rose just 2.2% to $171.9 billion on shipments mostly of soybeans, reported the U.S. Bureau of Economic Analysis.
So far this year, the U.S. has recorded a trade gap of $421.8 billion — up 5.7% from January to August 2019 — even though balancing the trade gap has been a signature promise of Trump’s.
U.S. Trade Representative Robert Lighthizer tried to put a positive spin on the figures, saying that Americans have more money to spend on imports than residents of other nations because the U.S. economy is bouncing back more quickly, MarketWatch reported. Over the years, Americans have generally spent more on imports, yet the trade deficit has been consistently attacked by Trump.
A union representative from a Michigan steel plant blasted Trump for the failure of his tariff scheme to save steelworkers’ jobs, as he had promised.
“I don’t see any policy that helped us,” said Bob Kemper, grievance committee chairman at Great Lakes Works’ chapter of the United Steelworkers Union. “We are losing our damn jobs here.” Great Lakes has shut its steelmaking operations, cutting 1,250 workers.
Trump vowed to revive the steel and coal industries in his 2016 campaign. But steelmakers have served layoff notices to nearly 2,000 workers since the tariffs took effect, according to Reuters.
Michigan’s manufacturing sector now employs 55,100 fewer workers than it did when Trump took office in January 2017, according to U.S. Labor Department statistics. The battleground state, which Trump won by fewer than 11,000 votes last time, is vital to his reelection.
Employment in the coal industry has dropped 9% since 2016, to about 46,000, as 66 coal plants — nearly 20% of all operations in the U.S. — have closed.
Trump imposed a 25% tariff in 2018 on imported steel, and China in turn set retaliatory tariffs. International demand for U.S. steel dropped due to the retaliatory tariffs, and American businesses that still needed to import goods were hit with higher costs.
In addition, the price of tariffs tacked onto American consumer goods is costing the average U.S. family an additional $1,277 this year, according to a study by the nonpartisan Congressional Budget Office. They cost American businesses $46 billion at the start of 2020.
Trump declared as he began to impose his tariffs that trade wars were “easy to win.”
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