Economy

U.S. Trade Deficit Reaches Record High Level

JM Ashby
Written by JM Ashby

According to the Department of Commerce, the U.S. trade deficit has reached a record high level for reasons you may not necessarily guess.

While the holiday shopping season regularly leads to an increase in trade, a series of record-setting natural disasters in 2017 including Hurricanes Harvey, Irma, and Maria have also contributed to the deficit.

Imports of goods and services hit a record high of $244.6 billion as the U.S. economy continued to strengthen and suck in more goods from abroad. Imports totaled $48.2 billion from China, $39.4 billion from the EU and $28.7 billion from Mexico — all record highs. [...]

U.S. exports totaled $195.9 billion in October, unchanged from September. However, exports to China hit $13 billion, the highest since December 2013.

I would call this bad news, but not because there's necessarily anything wrong with American businesses and consumers importing more goods.

It's bad news because, when he sees it, Trump will probably add it to the pile of sham evidence he'll use as an excuse to unilaterally withdraw from the North American Free Trade Agreement (NAFTA).

What Trump almost certainly doesn't understand is that withdrawing from NAFTA will explode our trade deficit and hand a whole new windfall to Chinese businesses. American exports to Mexico and Canada will plummet and imports from China will increase because the economic incentives for trading with Mexico and Canada (instead of China) will vanish.

I still expect Trump will withdraw from NAFTA, but not until next year. He'll do it in the Spring. You know, when he gets bored.

  • muselet

    Donald Trump was very excited about tariffs during the campaign, so I expect this news will lead him to start a trade war against the rest of the world and the WTO, probably in the spring.

    It will make an amusing distraction from the death and destruction in the Middle East that will surely follow Trump’s declarations on Jerusalem today.

    –alopecia

    • The Jerusalem decision is so stupid on so many levels, I just can’t even work up the energy to be angry any more.

      • Draxiar

        I’m telling you what Irish…me friggin too. I just want the man gone regardless of how it happens.

  • Dread_Pirate_Mathius

    He tried to tell us. He tried to warn us.

    “Nobody understands trade like I do.”

    We just didn’t understand. He wasn’t saying he understands trade better than anyone else.

    He was trying to warn us that his understanding of trade is so warped that he is the only one on the planet who understands it that way.