Reducing the trade deficit has been a goal for U.S. President Donald Trump, but on Wednesday, the Commerce Department reported that the trade deficit increased 12.5 percent in 2018, resulting in a 10-year high.
To end 2018, the trade deficit went 18.8 percent higher during the month of December, resulting in the final $621 billion gap. That figure represents the largest gap since 2008 and follows the $552.3 billion deficit in 2017.
The rise in the deficit comes as President Trump is looking to conclude trade negotiations with China. Trade talks have already moved past the initial March 1 deadline with the notion that the capital markets have already priced in a deal, resulting in sell-offs this week.
On Wednesday, the Dow Jones Industrial Average declined as much as 150 points and could finish with three losing sessions in a row. On Monday, the Dow fell over 200 points.
“There’s just a lot of good news priced in. We’ve had more than a year’s worth of gains already on the progress with China and the Fed (staying patient),” said Aaron Clark, portfolio manager at GW&K Investment Management. “It makes sense that we get a digestion period after such a strong rally. I think that’s what we’re seeing now.”
In the video below, Kara Murphy, chief investment officer at United Capital, and Dean Maki, chief economist at Point 72, examine the U.S. trade deficit, which widened to a 10-year high of $621 billion in 2018. They speak on “Bloomberg Daybreak: Americas.”
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