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The U.S. trade in goods and services international trade deficit decreased 1.7% in 2019, to place oneself in 616.8 billion dollars, the first decline in six years, the Commerce Department reported on Wednesday, in the framework of the open trade war with China that marked a significant tariff increase.
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Last year, the US exports fell 0.1% (up to USD 2.5 billion), while the Imports fell 0.4 percent (up to USD 3.1 billion). The most prominent item is oil: the US imported 19.3% less crude, to USD 126.6 billion.
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As for the trade balance with China, the main US partner and rival, the deficit fell 17.6% to USD 345.6 billion. In January, both powers signed an agreement that halted the planned tariff increases.
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However the deficit grew 26.2% compared to Mexico up to record of USD 101,800 million. A historical figure for the negative balance was also marked with the European Union, which grew 5.5% to USD 177.9 billion.
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One of the pillars of Trump’s campaign was to reduce the huge and persistent US trade deficits, which he sees as a sign of economic weakness and the result of unbalanced trade agreements that put American exporters at a disadvantage. In this context, in addition to the commercial war, he has negotiated a new trade agreement with Canada and Mexico that, according to him, will bring a greater balance to trade in North America.
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The mainstream economists argue that trade deficits are not inherently bad, since they are largely the result of a great economic reality that does not respond much to changes in trade policy: Americans spend more than they produce, and imports fill the void.
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