Tariff Mistake Smoking Gun: Trade Deficit Soars, Expect Negative GDP Revisions

At -59.8 billion, the trade deficit blew past the top estimate of any Econoday economist, up a whopping 18.8%.

Due to the government shutdown, we are just now getting the Goods and Services Trade Report for December 2018.

Exports, Imports, and Balance

December exports were $205.1 billion, $3.9 billion less than November exports. December imports were $264.9 billion, $5.5 billion more than November imports.

The December increase in the goods and services deficit reflected an increase in the goods deficit of $9.0 billion to $81.5 billion and a decrease in the services surplus of $0.5 billion to $21.8 billion.

For 2018, the goods and services deficit increased $68.8 billion, or 12.5 percent, from 2017. Exports increased $148.9 billion or 6.3 percent. Imports increased $217.7 billion or 7.5 percent.

Year-over-year, the average goods, and services deficit increased $6.2 billion from the three months ending in December 2017.

Imports vs Exports

By Country

  • China: The deficit with China increased $3.2 billion to $38.7 billion in December. Exports increased $0.4 billion to $7.7 billion and imports increased $3.6 billion to $46.4 billion.
  • Mexico: The deficit with Mexico increased $2.1 billion to $8.8 billion in December. Exports decreased $1.3 billion to $21.1 billion and imports increased $0.8 billion to $29.9 billion.
  • Canada: The deficit with Canada decreased from .8 billion to .7 billion. Exports fell by $0.5 billion while imports fell by $0.6 billion.

By Country 2018 Totals

  • China: The deficit with China increased from $375.6 billion to $419.2 billion. Exports fell from $129.9 billion to $120.3 billion. Imports rose to $539.5 billion from $505.4 billion.
  • Mexico: The deficit with Mexico increased from $70.9 billion to $81.5 billion. Exports to Mexico rose from $243.3 billion to $265.0 billion. Imports from Mexico rose from $314.3 billion to $346.5 billion.
  • Canada: The deficit with Canada increased from $17.1 billion to $19.8 billion. Exports rose from $282.3 billion to $298.7 billion. Imports rose from $299.3 billion to $318.5 billion.
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