Published: Wed, February 07, 2018
Global Media | By Garry Long

Canada December trade deficit jumps as imports hit record high

Canada December trade deficit jumps as imports hit record high

On Tuesday, the Commerce Department announced that the the deficit for goods and services rose to $566 billion - the highest level since 2008, when it stood at $708.7 billion, the Associated Press reported.

The goods deficit was the chief factor driving Tuesday's worse-than-expected print, widening by 3.7% to $73.3bn, while the services surplus dipped by 0.1% to $20.2bn.

The US trade deficit expanded in December 2017 and throughout the year has risen to its highest levels since 2008.

Notably the US deficit in goods soared previous year to a record-high $375.2 billion with China, a nation that Trump has both demonized and praised on trade during his tenure. Imports from China and Mexico hit record highs The year 2017 saw the USA importing more foreign-made cars, computers, cell phones and other consumer goods, much of which were produced in China.

The surge in the December trade deficit was flagged by an advanced goods trade deficit report published in late January. While improving overseas growth and a weaker dollar bode well for exports, Trump's efforts to seek more favorable terms with US trading partners remain a work in progress, and his tax-cut legislation may cause the deficit to widen further.

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Trade was a hallmark issue of President Donald Trump's campaign. The deficit in goods with China jumped 8.1 percent hit a record $375 billion.

Imports from Mexico also hit a new record high. Both showed the biggest gains since 2011.

According to The Washington Post, economists blame a stronger economy for an increase in trade generally and noted that imports rose faster than production. The economists interviewed expected a low value of 52.2 billion Dollars.

Exports rose 1.8 percent to $203.4 billion in December from the previous month, led by record shipments of capital goods and gains in industrial supplies and materials.

"It was a flat month and not a great handover into 2018". Net exports subtracted 1.13 percentage points from gross domestic product growth, which registered an annualized rate of 2.6 percent in the October-December period.

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