U.S. trade gap swells as Trump renews scrutiny of deficits
by Beiyi SEOW
The U.S. trade gap swelled last year to its second-largest on record, government data showed Wednesday, as deficits come under the spotlight with President Donald Trump's return to the White House.
In 2024, the overall US trade deficit grew to $918.4 billion, widening 17 percent from 2023 as imports ballooned more than exports, said the Commerce Department.
The trade deficit in goods also reached a new record for the year, in official data going back to 1960.
The high figures could attract renewed scrutiny under the new U.S. administration, with Trump already threatening tariffs on major US partners over trade imbalances and other issues.
Over the weekend, Trump announced fresh duties on the United States' three biggest trading partners in goods -- Canada, Mexico and China -- before reaching deals with Canada and Mexico to halt the levies for a month as talks continued.
Chief among his justifications were concerns over illegal immigration and the flow of deadly fentanyl across US borders, but he has previously also pointed to America's trade deficits with its neighbors.
Stock markets wavered as tariffs targeting Beijing came into effect Tuesday, with an accompanying suspension of duty-free exemptions for low value parcels sparking worry.
With Beijing's announced retaliation, economies are on edge over the prospect of broadening trade wars.
For all of last year, imports jumped by 6.6 percent or $253.3 billion while exports increased 3.9 percent by $119.8 billion.
Driving the growth in goods exports were products like computer accessories and semiconductors, while travel was a key factor behind services exports growth.
Imports surged on the back of goods like consumer goods, computers and semiconductors, as well as foods.
- Uncertain path ahead -
"Looking forward, the path for trade remains uncertain due to the capricious nature of the Trump administration's tariff policies," said Matthew Martin, senior economist at Oxford Economics.
"While Mexico and Canada may be spared, the tariffs on China stuck and we expect the European Union to be next in the cross-hairs," he added in a note.
Martin expects computer and electronic products from China would likely be impacted the most, adding that there are risks involving chemicals and manufacturing equipment from the EU.
For all of 2024, the goods deficit with China -- a major issue during Trump's first administration -- came in at $295.4 billion.
This was wider than values for the trade gap with North American neighbors Canada and Mexico combined, and more than the gap with the EU as well, according to government numbers.
In December alone, the U.S. deficit rose by nearly 25 percent to $98.4 billion, said the Commerce Department.
The figure was slightly above the consensus estimate by Briefing.com of $98.0 billion.
Imports rose 3.5 percent to $364.9 billion while exports slipped 2.6 percent to $266.5 billion for the month.
"The jump in import volumes may reflect companies efforts to accelerate imports to beat Trump import threats," said Carl Weinberg and Mary Chen, of High Frequency Economics.
But they added it was hard to prove, given that strong exports also indicate "a fast-growing economy that is near its full potential level of output."
Trump has threatened tariffs on the EU, previously saying they had treated Washington "very badly."
© Agence France-Presse
‘Homina, homina’: CNN’s Bash nails Republicans for fleeing Trump questions
CNN's normally stoic Dana Bash made fun of the Republican leadership on Wednesday morning as they stammered and fled reporters seeking a comment on Donald Trump's plan to occupy Gaza by moving 2 million Palestinians out.
The president set off a firestorm on Tuesday during a press conference where he said he thought it would be a great idea for the U.S. to make the war-torn Gaza Strip the "Riviera of the Middle East."
To the delight of Israeli Prime Minister Benjamin Netanyahu, Trump told reporters, "The U.S. will take over the Gaza Strip, we'll own it, and be responsible for dismantling all of the dangerous unexploded bombs and other weapons on the site … level it out, create an economic development that will supply unlimited numbers of jobs and housing for the people of the area," before adding, "I do see a long-term ownership position."
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Late Tuesday and early Wednesday, Trump's proposal had Republicans scrambling.
On CNN, "Inside Politics" host Bash showed a clip of House Majority Leader Mike Johnson (R-LA) searching for words as he told reporters, "A — look, there'll be more details forthcoming on that, of course. The initial announcement yesterday, I think, was greeted by surprise by many, but cheered by, I think, people all around the world."
In a subsequent clip, Senate Majority Leader John Thune (R-SD) didn't fare much better as he fled into a room while using his aides as human shields to keep reporters away. Thune could be heard saying, "... a more peaceful and secure Middle East ––put some ideas out there," as he threw his hands up.
"Homina, homina, I think is another way to say it," Bash smirked as the clip ended. and her panel laughed.
Prior to the clips running Bash pepped her audience, by explaining, "Well, it's a good thing that John Thune, the Senate Majority Leader, is a runner, so he does stretch every morning. I'm not sure about Mike Johnson, but he's definitely more of a yoga guy."
