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Trade Deficit Hits Ten-Year High in 2018, Jumps 19 Percent in December

Friday, March 08, 2019
Sandler, Travis & Rosenberg Trade Report

The U.S. trade deficit in goods and services jumped 18.9 percent in December and grew 12.5 percent from 2017 to 2018, according to trade statistics released March 6 by the Department of Commerce. The monthly and annual deficits were the highest since 2008, and 2018 was the second straight year the annual deficit hit a record high.

According to press sources, in 2018 the trade deficit with China hit an all-time high despite the imposition of tariff increases against a large percentage of imports from that country. Deficits with the European Union and Mexico were also reportedly the largest ever.

Monthly statistics. The monthly trade deficit in goods and services was $59.8 billion in December 2018, up from $50.3 billion in November. Exports fell 1.9 percent to $205.1 billion while imports rose 2.1 percent to $264.9 billion.

The deficit in goods trade soared 12.4 percent to $81.5 billion in December. Imports of goods rose 2.4 percent to $217.2 billion, including increases of $700 million each in computers, computer accessories, and household and kitchen appliances along with a $600 million increase in cell phones and other household goods. Exports of goods tumbled 2.8 percent to $135.6 billion, including decreases of $1.4 billion in industrial supplies and materials and $1 billion in civilian aircraft.

The services surplus continued its recent decline, down another 2.2 percent to $21.8 billion. Imports rose 1.1 percent to $47.7 billion and exports saw a small decline to $69.5 billion.

Country/region

Deficit

% Change

Surplus

% Change

China

$38.7 billion

+8.5

   

European Union

$15.8 billion

+14.5

   

Mexico

$8.8 billion

+29.4

   

Germany

$5.7 billion

+1.8

Japan

$5.5 billion

-3.5

   

Italy

$3.0 billion

+11.1

   

South Korea

$1.7 billion

-10.5

   

Taiwan

$1.6 billion

0

France

$1.5 billion

+15.4

India

$1.4 billion

-17.6

   

Saudi Arabia

$1.2 billion

-20.0

   

Canada

$0.7 billion

-12.5

   

South/Central America

   

$3.5 billion

-27.1

Hong Kong

   

$2.2 billion

-15.4

Brazil

$0.8 billion

+14.3

United Kingdom

   

$0.6 billion

-33.3

Singapore

   

$0.4 billion

-50.0

Annual statistics. For all of 2018 the U.S. trade deficit totaled $621.0 billion, up $68.8 billion from 2017. Exports rose 6.3 percent to $2.33 trillion and imports were up 7.5 percent to $3.10 trillion.

The goods deficit grew by 10.4 percent to $891.3 billion, an all-time high. Exports were up 7.6 percent to $1.67 trillion, including increases of $24.6 billion in crude oil, $14.4 billion in other petroleum products, $7.9 billion in civilian aircraft engines, $2.9 billion in other industrial machines, and $2.5 billion in computer accessories. Imports were up 8.6 percent to $2.56 trillion, including gains of $24.6 billion in crude oil, $23.7 billion in pharmaceutical preparations, $8.7 billion in computers, $5.4 billion each in electric apparatus and computer accessories, and $5.1 billion in other industrial machines.

The services surplus rose 5.9 percent to $270.2 billion. Exports increased 3.8 percent to $828.1 billion while imports rose 2.8 percent to $557.9 billion.

The deficit was 3.0 percent of gross domestic product in 2018, up from 2.8 percent in 2017.

Country/region

Deficit

% Change

Surplus

% Change

China

$419.2 billion

+11.7

   

European Union

$169.3 billion

+11.8

   

Mexico

$81.5 billion

+14.6

   

Germany

$68.3 billion

+6.2

Japan

$67.6 billion

-1.7

   

Ireland

$46.8 billion

+22.8

   

Italy

$31.6 billion

0

   

Malaysia

$26.5 billion

+7.7

   

India

$21.3 billion

-7.0

   

Canada

$19.8 billion

+12.5

Thailand

$19.3 billion

-5.4

Switzerland

$18.9 billion

+32.2

South Korea

$17.9 billion

-21.8

   

France

$16.2 billion

+5.9

   

Taiwan

$15.5 billion

+14.0

   

Indonesia

$12.6 billion

-5.3

   
         

South & Central America

   

$41.5 billion

+21.0

Hong Kong

   

$31.1 billion

-4.3

Netherlands

   

$24.8 billion

+1.2

Australia

$15.2 billion

+4.1

Belgium

   

$14.2 billion

-4.1

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