March 6 (UPI) — The U.S. trade deficit ballooned to nearly $900 billion last year — one of the greatest gaps in United States history — despite moves by the Trump administration over the past year to keep it down.
The U.S. Commerce Department issued its final report Wednesday on the trade gap, which showed a record level of more than $891 billion. It also showed the largest-ever gap with China, $419 billion
President Donald Trump’s “America First” policy led to new trade agreements with Canada and Mexico and has driven the administration to seek a more favorable deal with China. Representatives of both governments have met to discuss the prospects and experts have said an agreement could be announced this month.
Trump has previously called the trade deficit “unsustainable” and said it represents a transfer of wealth from the United States to foreigners.
A significant factor in the historically-large deficit are tariffs from the administration against numerous foreign-made products like solar panels, washing machines and raw building materials like steel and aluminium.
Trump has said the tariffs are intended to protect U.S. jobs and take a stand against what he views as poor business arrangements with Beijing. The tariffs are a major factor in the ongoing trade war between Washington and Beijing.
China has offered to buy $1.2 trillion in additional U.S. products over the next six years in exchange for removing tariffs on both sides.
Economists said activity from cash-fluid businesses and consumers helped increase the buying of imports 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 who works at the Center for Strategic and International Studies.
The record $891 billion deficit shattered the previous high of $838.3 in 2006, a time when the U.S. housing market was near its peak.