This archive report was first published on 5 November 2019.
Published on November 5, 2019, data released by the Commerce Department showed that the overall US trade deficit continued to widen in the first nine months of 2019, defying a Trump administration plan to try to shrink the figure by renegotiating trade agreements.
The trade deficit for both goods and services grew to $481.3 billion in the first three quarters of the year, up 5.4 percent from the same period last year. Total American exports fell by $7 billion from the previous year, while imports grew by $17.8 billion.
President Trump has pointed to the trade deficit as a sign of a hollowed-out manufacturing sector, and promised to shrink the figure by reworking the terms of trade between the United States and other countries. However, the data released Tuesday suggest that the global trade wars Mr. Trump has launched have not had the desired effect.
The tariffs Mr. Trump has placed on more than $360 billion of Chinese goods, and the retaliatory tariffs China has placed on the United States, have clamped down on trade between the countries. The United States trade deficit in goods with China shrank in the first nine months of the year to $263.2 billion, down from $301.7 billion in the previous year.
However, the United States has shifted to importing more goods from other locations instead, as American companies turn to buying more goods from Mexico, Vietnam, Taiwan and elsewhere. The trade deficit in goods with Mexico grew to $76.1 billion in the first nine months of 2019, up from $59.1 billion last year.
Brad Setser, an economist at the Council on Foreign Relations, noted that higher tariffs on China are working in a narrow sense, as they have reduced trade and thus the trade deficit with China. However, economists typically caution against reading too much into figures from a single month, which can be volatile.
