Trump wanted to contain it: US trade deficit continues to swell

It's one of the US president's favorite topics: the trade deficit. Trump took office with the promise to dismantle it. But now it's bigger than it has been since 2008.

The US trade deficit reached its highest level in more than twelve years in August. The imports rose in the previous month by 3.2 percent to 239 billion dollars (203 billion euros), the exports climbed by 2.2 percent to 171.9 billion dollars, such as the Department of Commerce in Washington announced. This increased the deficit in August by almost six percent to $ 67.1 billion. The trade deficit had already increased by 19 percent in July compared to the previous month. According to Oxford Economics, the August deficit is the largest since 2008 and the third largest since measurements began.

The US trade deficit that has existed for decades is a thorn in the side of President Donald Trump. It was one of his main campaign topics four years ago. In particular, he attacked China and Germany. "You win against us," he said. He also made a name for himself as an opponent of free trade agreements and, for example, immediately cashed in on the planned Trans-Pacific Free Trade Agreement TPP, which the previous government under President Barack Obama had negotiated. He also issued numerous tariffs, for example against Chinese goods.

After all: the deficit in trade with China has now decreased – mainly due to increased exports from the USA to the People's Republic. In trade with Germany and Japan, on the other hand, the deficit increased. For local companies, the United States is the most important sales market outside of Europe – 8.7 percent of exports go there.

More soy exported

The USA mainly imports consumer goods, intermediate goods for the pharmaceutical industry and automobiles from abroad. In August, the main exports were industrial machinery and agricultural products – sales of soy abroad alone rose by one billion dollars compared to July. However, compared to the previous year, exports were 17.6 percent lower due to the Corona crisis, while imports were 13.1 percent below the value of August 2019.

In January, after a trade dispute with China for almost two years, the Trump administration reached an agreement in which Beijing committed itself to significantly more imports from the United States. However, the effects of this deal have been erased by the coronavirus pandemic. The "Phase 1" treaty also leaves out some contentious issues on which Washington and China continue to disagree.