» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
TDN Services
Research millions of people and properties [+]
Monitor any person, property or company [+]

Skip Navigation LinksHome >
VOL. 132 | NO. 48 | Wednesday, March 8, 2017

US Trade Deficit Jumps to 5-Year High of $48.5 Billion

By MARTIN CRUTSINGER, AP Economics Writer

Print | Front Page | Email this story | Comments ()

WASHINGTON (AP) – The U.S. trade deficit jumped in January to the highest level in nearly five years as a flood of mobile phones and other consumer products widened America's trade gap with China. The result underscores the challenges facing President Donald Trump in fulfilling a campaign pledge to reduce America's trade deficits.

The deficit in January rose 9.6 percent to $48.5 billion, up from a December deficit of $44.3 billion, the Commerce Department reported Tuesday. It was the largest monthly gap since a deficit of $50.2 billion in March 2012.

U.S. exports edged up a slight 0.6 percent to $192.1 billion, helped by stronger auto sales. But that was swamped by a 2.3 percent surge in imports to $240.6 billion, led by mobile phones, oil and foreign-made cars.

During the campaign, Trump pledged to attack America's persistent trade deficits, which he blamed for the loss of millions of good-paying factory jobs. He has threatened to slap punitive tariffs on imports from China, Mexico and other nations he has accused of trading unfairly. But economists worry that Trump's tough talk could spark all-out trade wars in which foreign nations retaliate by boosting their tariffs on American goods.

White House trade adviser Peter Navarro, a long-time critic of China's trade practices, told an economists' group on Monday that reducing America's trade deficits would deliver stronger economic growth and improve national security.

For January, the U.S. deficit with China increased 12.8 percent to $31.3 billion, the highest level since September. The figure reflects a big rise in imports of mobile phones, clothing, televisions, toys and games.

American exporters have struggled over the past two years as a rising dollar has made their goods more expensive and therefore less competitive in overseas markets.

Economists believe if the dollar stabilizes this year, export growth should rebound, reflecting in part stronger economic growth in many of America's major export markets.

Andrew Hunter, U.S. economist for Capital Economics, said that the big increase in the deficit in January likely signals that trade will drag overall growth in the first quarter. But he said the impact wouldn't be as severe as in the fourth quarter, when trade trimmed growth by 1.7 percentage points.

And brighter days may be ahead.

"With the headwind from the dollar's prior appreciation having eased and global growth picking up quite sharply, the outlook for exports is better now than it has been in some time," Hunter said.

The trade deficit is the difference between imports and exports. A rising deficit is a drag on overall economic growth because it means more products are being produced for domestic consumption from overseas.

The trade deficit is expected to trim overall economic growth by around one-half percentage point this year. Many economists are looking for the U.S. economy to grow between 2 percent to 2.5 percent in 2017, up from anemic 1.6 percent growth in 2016.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 38 38 20,670
MORTGAGES 45 45 23,790
FORECLOSURE NOTICES 24 24 3,071
BUILDING PERMITS 187 187 42,781
BANKRUPTCIES 57 57 13,237
BUSINESS LICENSES 23 23 6,645
UTILITY CONNECTIONS 30 30 7,819
MARRIAGE LICENSES 27 27 4,670