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U.S. trade gap balloons to 10-year high

Credit: Reuters Studio
Published on March 6, 2019 - Duration: 01:22s

U.S. trade gap balloons to 10-year high

The U.S. deficit surged to a 10-year high in 2018 despite President Trump's "America First" policies.

As Fred Katayama reports, analysts says U.S. economic policies exacerbated the gap instead of shrinking it.

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U.S. trade gap balloons to 10-year high

The U.S. trade gap ballooned to a 10-year high last year despite President Donald Trump's "America First" policies aimed at shrinking it.

The sore spot: trade with China.

The shortfall soared to record of more than $419 billion.

That despite the tariffs the U.S. slapped on $250 billion worth of Chinese goods… U.S. consumers, apparently, were not deterred.

China struck back with duties of $110 billion worth of American products.

Lending Tree chief economist Tendayi Kapfidze says the Administration's tax cuts, stimulus meaures and tariffs exacerbated the trade deficit.

SOUNDBITE: LENDING TREE CHIEF ECONOMIST TENDAYI KAPFIDZE, (ENGLISH) SAYING: "What they did is they juiced up the economy, increasing demand in the U.S. economy, and a lot of that demand comes from purchases from foreign countries and that increases our imports.

And then, simultaneously, they were creating this trade war, trade skirmish, tariffs, and so and and so forth, which was reducing demand from the rest of the world for U.S. goods.

So that is what led to increasing the U.S. trade deficit." The U.S. trade deficit also shot up to a 10-year high for the month of December.

The deteriorating trade situation was a factor in slowing U.S. economic growth in the fourth quarter.

The downbeat data is the latest in a series of weak economic reports, including retail sales, construction spending, home starts, and business spending.

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