Washington (AFP) – The US trade gap swelled last year to nearly $920 billion, according to government data released Wednesday, as deficits come under the spotlight with President Donald Trump’s return to the White House. In 2024, the overall US trade deficit grew to $918.4 billion, widening 17 percent from 2023 as imports ballooned more than exports, said the Commerce Department.
This could attract renewed scrutiny under the new administration, with Trump already threatening tariffs on major US partners over trade and other issues. Over the weekend, Trump announced fresh duties on the United States’ three biggest trading partners in goods — Canada, Mexico, and China — before reaching deals with Canada and Mexico to halt the levies for a month as talks continued. Chief among his justifications were concerns over illegal immigration and the flow of deadly fentanyl across US borders, but he has previously also pointed to America’s deficits with the countries.
Stock markets wavered as tariffs targeting Beijing came into effect Tuesday, with an accompanying suspension of duty-free exemptions for low value parcels sparking worry. With Beijing’s announced retaliation, economies are on edge over the prospect of broadening trade wars. For all of last year, imports jumped by 6.6 percent or $253.3 billion while exports increased 3.9 percent by $119.8 billion. Driving the growth in goods exports were products like computer accessories and semiconductors, while travel was a key factor behind services exports growth.
Imports surged on the back of goods like consumer goods, computers and semiconductors, as well as foods. For all of 2024, the goods deficit with China — which was a major issue during Trump’s first administration — came in at $295.4 billion. This was wider than values for the trade gap with North American neighbors Canada and Mexico combined, and more than the gap with the European Union as well, according to government numbers.
In December alone, the US deficit rose by nearly 25 percent to $98.4 billion, said the Commerce Department. This was slightly above the consensus estimate by Briefing.com of $98.0 billion. Imports rose 3.5 percent to $364.9 billion while exports slipped 2.6 percent to $266.5 billion for the month.
“The jump in import volumes may reflect companies’ efforts to accelerate imports to beat Trump import threats,” said Carl Weinberg and Mary Chen, of High Frequency Economics. But they added that this is hard to prove, given that strong exports also indicate “a fast-growing economy that is near its full potential level of output.” Beyond the United States’ immediate neighbors, Trump has also threatened he would impose tariffs on the EU, previously saying they had treated Washington “very badly.”
© 2024 AFP
