President’s Trump’s trade war strategy is hurting our country; proving the strategy he credits to his instincts and gut feeling, may end up being more evidence of his incompetence.
By James DiGeorgia
Trump’s strategy of trying to reduce the U.S. trade deficit has resulted in a jump in the trade imbalance jumping to a 10-year high in October. The increase illustrates why Trump was so excited at the prospect of getting China back as a buyer of soybean exports. During October soybean exports took a nose-dive while at the same time U.S. imports of consumer goods rose to a record high. This is pretty clear indicators that that Trump’s tariff strategy isn’t helping reduce the net imbalance of imports versus exports.
The U.S Commerce Department reported that the U.S trade deficit increased 1.7 percent to $55.5 billion, the highest level since October 2008. Another worrisome indicator is that the U.S. trade gap deficient has improved for that past five months.
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While President bragged that he was the “Tariff Man” the trade deficit with China jumped 7.1% to a record $43.1 billion in October.
President Trump in spite of these numbers continues to wage this bitter trade war with China imposing tariffs on $250 billion worth of Chinese imports to force concessions on a list of demands that would change the terms of trade between the two countries. Instead, China has dug in their heels and responded with import tariffs on U.S. goods, including soybeans.
Last Saturday on the sidelines of G20, Trump and Chinese President Xi Jinping agreed at a diplomatic working dinner to hold off on imposing more tariffs for 90 days while the two countries attempt to negotiate a deal to end the ongoing trade war.
Reuters in a recent poll of economists had forecast the overall trade deficit is rising to $55.0 billion in October. This high trade deficit is predicted to further damage the on the gross domestic product in the fourth quarter and will add to economic pressures starting to signal a recession including the inversion of interest rates, weak housing and business spending on equipment. The resulting economic slowdown subtracted 1.91 percentage points from GDP growth in the July-September quarter. The strengthening U.S dollar is probably restraining overall export growth
While the news is pretty bad, U.S. exports of petroleum, as well as consumer goods, were the highest on record.