Data released by the Commerce Department today is expected to show a slight narrowing of the US trade deficit through August.
While experts disagree on whether America’s trade deficit really needs to be addressed, President Trump has made its reduction a key priority. To achieve this feat, Mr Trump has already pulled the US out of the Transpacific Partnership Agreement and has vowed to impose higher tariffs on certain imports, like steel and aluminium.
So far, this strategy has not had the desired effect; since January the overall US trade deficit has risen by 10% to $320 billion. Ironically, Trump’s desire to impose tariffs on Chinese steel and aluminium imports has been a key driver of this raise. While the tariffs are still in the planning phase, steal and aluminium imports have added more than $10 billion to the US trade deficit between January and July.
While negotiations on NAFTA and the Korea-US Free Trade Agreement won’t be complete for some months, the detrimental effect that the spectre of tariffs has had doesn’t bode well for the president’s plan. Regardles, Trump will likely attribute August’s expected trade deficit reduction to his “America First” approach and use it as justification to continue pursuing protectionist policies.
Delve deeper: 2017 Geopolitical Forecast: The Americas
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