The US international trade in goods and services deficit jumped 5% in January to the highest point in almost 10 years. George W Bush was in the White House the last time a monthly trade deficit topped the US$56.6 billion number seen in January.
According to data released by the US Bureau of Economic Analysis on Tuesday, January exports fell by US$2.7 billion over the previous month.
Meanwhile Chinese exports rose at the fastest pace in three years.
The data do not bode well for opponents of President Donald Trump’s actions to slap hefty tariffs on foreign-made metals from anywhere – except maybe Canada and Mexico – and to impose additional tariffs targeting Chinese IP-intensive products.
The president, along with top officials in charge of trade, maintains that trade deficits are the product of unfair trade deals, and a sign of weakness. That is in contrast to the widely held belief among economists that a deficit in trade can also be a sign of economic strength.
Besides tariffs on steel and aluminum imports, multiple media reports have indicated action on an investigation into Chinese intellectual-property theft and forced technology transfer, which analysts say would be more dangerous to global trade than the metals decision, is also ready to be announced at a moment’s notice.