The U.S. trade deficit rose by 5.9% in August to $67.1 billion, the highest level in 14 years, the Commerce Department reported Tuesday.
A record deficit – the difference in value between what the U.S. imports and what it exports – of $83.9 billion was set in August in the trade of products such as airplanes and appliances, the Associated Press reported. The U.S. had the lowest surplus since January 2012 – $16.8 billion – in the trade of services like banking and education. (RELATED: $55.5B May Trade Deficit Is A 5-Month Record)
The deficit with China declined by 6.7% to $26.4 billion, according to the Associated Press. President Donald Trump has repeatedly stressed the importance of balancing trade with China and lowering the deficit, which was something he campaigned on.
The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!
— Donald J. Trump (@realDonaldTrump) May 6, 2019
The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits…
— Donald J. Trump (@realDonaldTrump) March 30, 2017
As part of his effort to lower the American trade deficit, Trump renegotiated a North American trade agreement to encourage domestic production. The new agreement, “The United States-Mexico-Canada Agreement” (USMCA), was announced Jan. 29 in a White House statement. He also imposed tariffs against more than $200 billion worth of products from China.
The president has threatened to cut off the U.S. relationship with China entirely following the global outbreak of the coronavirus pandemic, a move that he said would “save $500 billion.” Coronavirus has had a major impact on the world economy and U.S. trade. Total U.S. trade, or the value of goods and services that the U.S. sold to other countries plus the amount bought from other countries, dropped down to $3.2 trillion in 2020, representing a decrease of 15.1%, according to the Associated Press.
The coronavirus pandemic has reportedly caused an increase in demand for foreign goods while weakening demand for domestic goods, making the task of lowering the trade deficit a difficult one.