The US trade deficit with Beijing climbed to historic heights in 2017. This will result in stricter trade actions by the US government under president Trump’s leadership in the coming weeks. In last year alone, the difference between the US products exported to China and the Chinese goods entering the American market inflated to $375.2 billion. This is a significant increase from $347 billion in 2016 according to a statistic that was released on Tuesday by the US Department of Commerce. The overall deficit for the US with the globe inflated to 12% which translated to $566 billion by the end of 2017 which is the biggest gap since the 2008/2009 financial crisis.
Financial markets experts and economists have alluded that the growth in trade deficits have been as a result from the growth of the US economy which has led to more and more American citizens being able to afford imported goods such as electrical appliances, clothing, and electronics. The decline in the value of the US dollar in the global market economy also led to the decline of American products abroad which increased the number of exports but not adequate to protect the gap from expanding. President Donald Trump has assured the American citizenry that his administration will do whatever is humanly possible to close in on the gap.
The trump administration has cited the trade deficit as evidence for the decline of the manufacturing industry in the United States and over-reliance on foreign products. On Tuesday, the Secretary for the Commerce Department, Wilbur Ross said that the US government was committed to reducing the trade deficits by enforcing more stringent rules of trade, forming new trade pacts and renegotiating the ones that are already in existence. Secretary Roll pointed out to the recent decision by President Donald Trump to impose new tariffs on electrical appliance imports such as washing machines and solar panels.
Trump has also pointed out that the US will renegotiate the North American Trade Agreement (NAFTA) with Mexico and Canada. The trade pact with Seoul will also be renegotiated as a way of attempting to narrow the gap in US trade deficits. Mr. Ross added that the US was undertaking strenuous efforts to close the gap. However, he alluded to the fact that it would not be practical to set a definitive deadline for such actions. Before Trump became president, Mr. Ross and Peter Navarro were the economic advisors to the then-Republican presidential campaign.