Washington (AFP) – The US trade deficit swelled in January to its largest level in nearly a decade as the world’s biggest economy exported less fuel and sold fewer aircraft, government data showed Wednesday.
The news comes amid White House furor over trade policy, with President Donald Trump’s top economic advisor Gary Cohn announcing his resignation late Tuesday after losing a bruising internal battle over whether to impose punishing tariffs on steel and aluminum.
Cohn’s resignation and the fear Trump will press ahead with restraints on trade have roiled global markets in recent days. While economists say a growing trade deficit can be a sign of economic recovery, Trump has attributed them to “cheating” by US trade partners.
Word of a broadening trade gap could add to fears of a stronger White House reaction. Aircraft giant Boeing and oil producers like Chevron, industries which saw falling exports, have objected to Trump’s planned tariffs on the crucial metals.
The January figures follow official reporting last month showing that the US trade deficit over all of 2017, Trump’s first year in office, also hit its highest level since the global crisis in 2008.
In the first month of the year, the US trade gap rose five percent over an upward-revised December to $56.6 billion, its highest level since October of 2008, overshooting analyst expectations of a two percent increase.
Year over year, this left the monthly deficit for goods and services up 16.2 percent over January of 2017, with exports trailing imports.
Exports fell 1.3 percent to $200.9 billion, the largest decrease in 16 months, as aircraft exports decreased in value by $1.8 billion and international sales of industrial supplies like crude oil and other chemicals fell by $1.3 billion.
Imports were unchanged at $257.5 billion.
US exports of services, including charges for the use of intellectual property, were the highest on record at $66.7 billion.
But the goods deficit with Canada reached its highest level in three years at $4.1 billion for the month.
Canada is the largest US supplier of steel and has strenuously objected to the tariffs, which Trump has tied to pending efforts to renegotiate the North American Free Trade Agreement.
With China, the goods deficit rose 16.7 percent to its highest level in more than two years at $36.3 billion.
But the trade gap with the European Union, which Trump has accused of unfairly blocking US exports, narrowed in January, falling 13.9 percent for the month to $13.9 billion.
The deficit with Germany fell 7.5 percent to $5.4 billion while the surplus with the Britain doubled to $200 million.