U.S. trade deficit soared to 10-year-high last year

14:12 | 08/03/2019 Global Economy

The U.S. trade deficit with the rest of the world jumped to a 10-year high last year according to the U.S. Commerce Department on Wednesday.

Photo Credit: AP

It said the country's deficit soared to 621 billion dollars in 2018 despite President Trump's "America First" policies aimed at shrinking the trade gap and increasing American exports.

The deficit in goods and services during December also hit a near 10-year high of nearly 60 billion dollars.
The rise was in part due to the global economic slowdown and a relatively strong greenback.

Both have weakened foreign demand for American goods and services.

Another report by the U.S. Federal Reserve called the beige book showed the U.S. economy expanded in January and February but added that half the country was seeing a fallout from the 35-day partial government shutdown.

It said some manufacturers expressed worries about weakening global demand for their products, adverse effects from trade protectionism and growing uncertainties regarding the government's policies.

The report said 10 of its 12 regions reported "slight-to-moderate growth" over the past two months and in the St. Louis and Philadelphia regions the situation was "flat" which is worse than its previous evaluation of "modest-to-moderate."

The beige book is normally used as a basis for the Fed in determining changes to its interest rates and with this, the expectation is that the central bank will remain "patient", leaving rates unchanged.

Luckily, China and the U.S. are reportedly closing in on a deal to officially end the trade war between the two countries with the South China Morning Post reporting that a trade deal could be signed by the countries' leaders during a planned meeting in Florida later this month.

Theo Arirangnews