Trade Deficit Rises to Highest Since 2008

The trade deficit rose in October to a 10-year high amid a record shortfall with China, keeping the U.S. on pace to record the largest annual gap in a decade. The deficit edged up 1.7 percent to $55.5 billion from a revised $54.6 billion in September, the Commerce Department said last week.

Part of the recent surge in imports reflects American companies stocking up on Chinese goods to get ahead of another increase in U.S. tariffs that was supposed to begin Jan. 1. The U.S. tariff increase has been postponed until March while China and the U.S. commit to more talks.

Exports slipped a tenth of a percent to $211 billion, largely because of a big drop in soybean shipments in response to retaliatory tariffs.

The trade deficit with China in goods, meanwhile, rose again to a fresh all-time high of $43.1 billion. Exports to China are running slightly behind last year’s pace.

The trade gap has continued to widen despite punitive Trump administration tariffs meant to reduce Chinese imports and force the Asian giant to alter unfair trade practices.

The U.S. trade deficit added up to almost $503 billion in the first 10 months of 2018. That compared to about $451 billion in the same span in 2017.

The last time the U.S. trade deficit was higher was in October 2008, when it topped $700 billion.

Source: MarketWatch