The U.S. trade deficit increased by more than $61 billion in 2017, the Commerce Department announced on Tuesday - an expected rise that sparked wildly different reactions and interpretations of the Trump administration's effect on the economy.
Analysts, however, said the broadening trade gap could cause downward revisions to GDP in the final quarter of 2017, taking the United States even further from Trump's goal of three-percent annual growth.
President Trump wants to reduce the trade deficit between the US and China and Mexico, arguing that his "America First" trade policies, coupled with full employment and the massive tax cuts that went into effect in January will give the country equal footing with the rest of the world. For all of 2017, the goods-and-services gap grew 12 percent to $566 billion, the biggest since 2008. Imports set a record $2.9 trillion, swamping exports of $2.3 trillion, according to CTV News Canada. The president recently placed tariffs on imported solar panels and washing machines, sparking concern the US may prompt trade wars.
Trade was a hallmark issue of President Donald Trump's campaign.
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The commodity trade with China increased by 8.1% previous year to a record 375.2 billion Dollars. As a result, the trade surplus with the United States, which accounted for 75.1 percent of Canadian goods exported in December, edged up to C$3.42 billion from C$3.28 billion in November.
The U.S. economy has run trade deficits for decades, during both economic expansions and recessions. The economists interviewed expected a low value of 52.2 billion Dollars.
The goods deficit with China rose to a record $375.2 billion, while the trade gap with Mexico hit $71.1 billion. Imports, however, rose by more: 2.5 percent to $256.5 billion.
"It was a flat month and not a great handover into 2018".
The jump in the so-called real trade deficit at the end of the year puts trade on course to be a drag on gross domestic product in the first quarter.