US Trade Deficit Largest since 2008


The U.S. trade deficit widened to USD 59.8 billion in December of 2018 from an upwardly revised USD 50.3 billion in the previous month and compared with market expectations of a USD 57.9 billion gap. It is the largest deficit since October of 2008 as exports declined for the third month and imports recovered. In 2018, the country's trade gap widened to a 10-year high, with the goods gap with China jumping to a record high despite tariffs on USD 250 billion worth of Chinese imports.

Total exports fell 1.9 percent month-over-month to USD 205.1 billion, following a 0.7 percent drop in November. Exports of goods decreased USD 3.9 billion to USD 135.6 billion, mainly dragged down by industrial supplies and materials (USD -2.1 billion); other petroleum products (USD -0.9 billion); crude oil (USD-0.5 billion); fuel oil (USD -0.4 billion); capital goods (USD -1.7 billion); and civilian aircraft (USD -1 billion). Exports of services dropped less than USD 0.1 billion to USD 69.5 billion, mainly due to transport (USD -0.2 billion) while sales of financial services increased USD 0.1 billion.

According to unadjusted data, exports fell to Canada (-10 percent), Mexico (-15.4 percent), the EU (-3.5 percent), Japan (-2.1 percent); and OPEC (-5.1 percent) but rose to China (6 percent) and Brazil (8.4 percent).

Total imports rose 2.1 percent to USD 264.9 billion, following a 2.8 percent plunge in November. Imports of goods increased USD 5.1 billion to USD 217.2 billion, driven by capital goods (USD 2.7 billion); computer accessories (USD 0.7 billion); computers (USD 0.7 billion); consumer goods (USD 2.4 billion); household and kitchen appliances (USD 0.7 billion); cell phones and other household goods (USD 0.6 billion). Imports of services went up USD 0.5 billion to USD 47.7 billion, mainly due to transport (USD 0.4 billion).

According to unadjusted data, imports rose to Brazil (4.4 percent) but fell from the remaining partners: China (-1.1 percent), Canada (-7 percent), Mexico (-8.4 percent), the EU (-2.4 percent), Japan (-2.3 percent), and OPEC (-11.6 percent). 

The goods deficit with China declined to USD 36.8 billion from USD 37.9 billion in November. The trade gap also narrowed with the EU (USD -15 billion from USD -15.1 billion), Japan (USD -5.7 billion from USD -5.8 billion) and OPEC (USD -0.3 billion from USD -0.8 billion) but widened with Mexico (USD -7.7 billion from USD -6.7 billion) and Canada (USD -1.4 billion from USD -0.7 billion). 

Considering full 2018, the goods and services deficit increased 12.5 percent from 2017 to USD 621 billion. It is the highest trade deficit in 10 years as exports went up 6.3 percent to USD 2499 billion and imports jumped at a faster 7.5 percent to USD 3121 billion. The goods deficit widened with all main trading partners except Japan: China (to a record high of USD -419.2 billion from USD -375.6 billion in 2017), the EU (USD -169.3 billion from USD -151.4 billion), Mexico (USD -81.5 billion from USD -70.9 billion), Canada (USD -19.8 billion from USD -17.1 billion) and OPEC (USD -21.3 billion from USD -12.9 billion). In contrast, the goods gap with Japan narrowed to USD 67.6 billion from USD 68.9 billion. 

US Trade Deficit Largest since 2008


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
3/6/2019 2:39:03 PM