Trade

Our Trade Deficit Climbs Along With Higher Tariffs

JM Ashby
Written by JM Ashby

Even though Trump increased tariffs on over $200 billion in Chinese goods from 10 to 25 percent during the month of May, our trade deficit also increased more than expected in May.

According to initial estimates from the Department of Commerce, imports grew more than exports in May and our trade deficit was about $4 billion higher than expected.

An early look at U.S. trade patterns in May points to a wider-than-expected trade deficit. The advance trade deficit in goods widened 5.1% to $74.5 billion, according to the Commerce Department.

Economists polled by MarketWatch has expected the deficit to narrow to $70.7 billion. [...]

Both imports and exports rose in May, but imports rose at a faster pace. The 3.7% gain in imports was led by autos and industrial supplies. Exports growth of 3% was led by food and consumer goods.

Our trade deficit is still climbing, even while Trump makes importing foreign goods more expensive, because there are thousands upon thousands of goods that we do not make in America. We have no choice but to import foreign goods even if the price is increasing.

China and other countries can turn to numerous other sources for goods they previously imported from America, such as soybeans and corn that Chinese importers are sourcing from Brazil, but many American companies cannot turn to anyone but China for thousands of products. And even those who can source their products from other countries are still contributing to our overall trade deficit.

We will always have a trade deficit no matter what Trump does. It's the way our economy is structured.

  • Badgerite

    Tariffs has never worked to revive domestic manufacturing. And it certainly won’t do so in today’s world.

  • muselet

    Golly, it’s almost as if tariffs don’t work the way Donald Trump belives (almost typed “thinks”) they do. What a surprise.

    –alopecia

  • Dread_Pirate_Mathius

    And the Republicans who spent the entire tenure of President Obama screeching about debt and deficit (and willfully conflating the two)….? Silence. Fucking, crickets.

    Don’t worry, though, Republicans will suddenly rediscover fiscal conservatism as soon as the next Democrat takes office.

    • muselet

      Funny how that always seems to happen.

      –alopecia

    • Tony Lavely

      Missed you.