The U.S. trade deficit rose to more than nine-year high in January, with the trade gap with China expanding rapidly, adding even more urgency to the case for “America First” trade policies.
Economists had expected the trade deficit to widen to $55.1 billion in January, up from the previously reported $53.1 billion in December. The Commerce Department said on Wednesday that the deficit soared to $56.6 billion. The December trade gap was revised up to $53.9 billion.
That is the widest trade gap since October 2008.
The deficit with China hit $36.0 billion, up by more than 16 percent. The trade gap with Canada was the highest since 2015.
The rising trade deficit shows the dangers of only partially implementing President Donald Trump’s policies. Consumer sentiment is near record highs, while his tax cuts and deregulatory policy have accelerated economic activity. But much of the added demand in the economy appears to be leaking out through imports, widening the trade deficit.