America's Trade Deficit Grows For Third Straight Year, Hitting All Time High......

The Commerce Department said Wednesday that — despite more than two years of President Trump’s “America First” policies — the United States last year posted a $891.2 billion merchandise trade deficit, the largest in the nation’s 243-year history.

The trade gap with China also hit a record $419 billion, underscoring the stakes for the president’s bid to reach a deal with Chinese President Xi Jinping as soon as this month.

The department’s final 2018 trade report, which was delayed by the partial government shutdown, showed that the United States bought far more in foreign goods than it sold to customers in Africa, Asia, Europe and North America. The shortfall topped the 2006 record of $838.3 billion, set as the housing bubble was peaking, and marked the third consecutive year of rising deficits.

A broader measure of the nation’s trade performance, which includes the services sector, showed a $621 billion deficit. That reflected a deterioration of more than $100 billion from the figure Trump inherited from president Barack Obama.

It has been evident for months that Trump was not shrinking a trade gap that he calls “unsustainable” and that he says represents a major transfer of wealth from Americans to foreigners. Over the past year, even as he imposed tariffs on foreign-made solar panels, washing machines, steel, aluminum and assorted goods from China, imports roared ahead of exports.

The president thus begins his reelection drive with a core campaign promise unfulfilled — and with a recent flurry of economic research showing that his embrace of tariffs is damaging the U.S. economy.

Economists say the trade deficit is swelling because of broad economic forces, including a chronic shortfall in national savings that was exacerbated by last year’s $1.5 trillion corporate and personal income tax cut. As cash-flush businesses and consumers increased their spending, purchases of imported goods rose while the overvalued dollar weighed on exports.

“Macroeconomics end up ruling. You can’t wish it away. You can’t tariff it away,” said William Reinsch, a former Commerce Department official now at the Center for Strategic and International Studies.

The Commerce Department report comes amid indications that negotiations with China over a broad trade agreement may be in their final weeks. China has offered to buy a reported $1.2 trillion in additional American products over the next six years in a deal that reportedly would ease each side’s tariffs, usher in changes to Beijing’s state-led economic model and include tough new enforcement mechanisms.

But most economists say that such increased Chinese purchases probably would only divert U.S. shipments from other foreign customers, shrinking the trade gap with China but leaving the global balance largely unchanged...

America is waiting for you Trump. We won't hold our breath.

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