The Commerce Department released a report Wednesday morning that showed the United States’ merchandise trade deficit hit $891.2 billion, the largest of its kind in American history. The report had previously been delayed because of the government shutdown.
The numbers stand in stark contrast to the promises that President Donald Trump made during his presidential campaign, in which he assured voters that his administration would achieve “fair trade, smart trade, I even like to say brilliant trade.”
During the second presidential debate, Trump sounded the alarm about a trade deficit that had ballooned to approximately $800 billion in 2015 (he was referring to the goods trade deficit at the time). “Last year, we had almost $800 billion trade deficit,” he said. “In other words, trading with other countries. We had an $800 billion deficit. It’s hard to believe. Inconceivable.”
But two years into Trump’s administration, that number is more than $90 billion higher.
The White House has consistently highlighted trade as a priority since Trump took office, and has sought a series of new trade deals with nations such as South Korea and China, as well as a celebrated attempt to secure a revised North American Free Trade Agreement (NAFTA) with Canada and Mexico. But none of these deals, whether wrought or merely proposed, have actually changed the rules to any significant degree.
The administration’s report also said that the “goods and services deficit was $59.8 billion in December, up $9.5 billion from $50.3 billion in November.” Americans exported fewer capital products, such as aircrafts, as well as less crude and fuel oil, and other petroleum products. Meanwhile, Imports of computers, appliances, and cell phones increased over this period of time.
While touting a claimed $52 billion drop in the trade deficit back in July of last year, Trump stated that trade deficits were “very dear to my heart, because we’ve been ripped off by the world.” However, that $52 billion figure proved to be factually inaccurate. Economists interviewed by Factcheck.org put the figure at a smaller $22 billion for the second quarter of 2018.
Despite the occasional drops in the trade defiicit measured quarter by quarter, the year-to-year trade picture nevertheless worsened from 2017 to 2018. Wednesday’s report showed that the 2018 trade deficit hit $621 billion — $68.8 billion higher than it was at the end of 2017.
This past December, there was a $3.5 billion December goods trade surplus with South and Central America, but this bright spot was dwarfed by the $38.7 billion deficit with China, which increased by $3.2 billion the same month.
In total, the goods trade deficit with China hit $419.2 billion in 2018, a jump from $376 billion in 2017 and $347 in 2016. Trump promised in 2015 that he would shrink the trade deficit with China to less than $100 billion per year.
“In China, think of this, we have a trade imbalance of almost $400 billion a year,” Trump told a crowd in 2015. “Can you imagine if we could straighten it out? Could you imagine if I could get that down to, and I promise I’ll do better than this, but could you imagine if I could get it down to $100 billion a year in losses?”
Additionally, Trump’s trade war with China has harmed American farmers, even as Trump touts “big progress” on a trade deal his administration has been negotiating with the Chinese government. Whether or not both sides agree to any new deal — and to what extent any deal actually improves America’s trade position — is immaterial for the families and businesses currently struggling with the impact of Trump’s tariff war with China. In the end, Wednesday’s report demonstrates the difficulty Trump has had fulfilling some of his most bombastic campaign promises.