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The US trade gap with the rest of the world jumped to a 10-year high of $621bn (£472.5bn) last year, dealing a blow to President Donald Trump's deficit reduction plan.

The trade deficit is the difference between how much goods and services the US imports from other countries and how much it exports.

Reducing the gap is a key plank of Mr Trump's policies.

But in 2018, the US exported fewer goods compared with how much it bought.

Mr Trump claims that the US is being "ripped off" by other nations and wants countries to lower their tariffs on US goods and buy more of them.

However, official data shows that while exports of US goods and services rose by $148.9bn last year, imports jumped by $217.7bn.

It means that the gap is the widest since 2008, when the global financial crisis hit and the US fell into recession.

The deficit in goods and services during December also hit a near 10-year high of $59.8bn.

Exports to the rest of the world fell 1.9% to $205.1bn, while imports rose by 2.1% to $264.9bn.

'Tariff man'

The US is currently locked in a trade battle with China over what it claims are unfair trade practices, resulting in tit-for-tat tariff increases on each others' goods.

Both nations are in discussions and there is speculation they could reach an agreement by the end of March.

New data shows that the trade gap between the US and China widened last year by $43.6bn to $419.2bn as exports of American products and services fell, but imports from China rose.

Analysis: Michelle Fleury, BBC North America business correspondent

It was one of Donald Trump's signature campaign promises.

Back in June 2016, he stood before a large crowd in Monessen, Pennsylvania and said that as President, he would reduce America's ballooning trade deficit.

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He called it "a political and politician-made disaster" and said "it can be corrected".

Only it hasn't exactly turned out that way.

Last year, Mr Trump introduced tariffs on steel and aluminium from around the globe and on a range of imports from China.

The idea was that the tariffs would make imports more expensive, thereby discouraging Americans from buying foreign goods and services and shrinking the trade deficit.

But the opposite has happened.

Instead, Donald Trump goes into the presidential re-election race having failed to deliver on his campaign promise to close the US trade deficit.

Part of the problem is Mr Trump's own tax policies. They boosted US consumption and a lot of that spending went abroad.

This happened as growth was slowing in other parts of the world, contributing to a rising dollar. That made US exports more expensive and less competitive.

Of course, an economic downturn would help reduce the trade deficit.

But who wants that?

Mr Trump warned in December that if the two countries failed to reach an agreement on trade, he would take action, dubbing himself "a Tariff Man".

'National security'

The deficit between the US and the European Union also increased in 2018, up by $17.9bn to $169.3bn.

Following the same trend as with China, US export growth to the EU was eclipsed by imports of European goods and services to America, which last year rose to $487.9bn.

Image copyright Getty Images Image caption Donald Trump and Jean-Claude Juncker reached a truce on trade last year

Following a spat between the US and the EU when America lifted tariffs on steel and aluminium, Mr Trump and European Commission President Jean-Claude Juncker last year reached a truce.

However, Mr Trump may choose to lift tariffs on European cars and parts after the US Commerce Department produced a report examining whether the imports threaten national security.

Meanwhile, US Trade Representative Robert Lighthizer and EU Trade Commissioner Cecilia Malmstrom are meeting on Wednesday in Washington, where the issue of allowing America's agriculture industry access to Europe is expected to be discussed.</s>"For 2018, the goods and services deficit was $621.0 billion, up $68.8 billion from $552.3 billion in 2017," the US Department of Commerce's Bureau of Economic Analysis said in a press release on Wednesday.

READ MORE: Trump Demands China Lift All Tariffs on US Agricultural Goods

The December trade gap jumped to $59.8 billion, which was also a 10-year high, according to media reports.

The US merchandise trade deficit increased by $83.8 billion, or 10.4 percent, to $891.3 billion in the past year, the Commerce Department said. According to the Washington Post, it is the largest merchandise trade deficit in the 243-year history of the United States.

China and the United States have been embroiled in a trade dispute since last June, when Trump announced that the United States would subject $50 billion worth of Chinese goods to 25 percent tariffs in a bid to fix the US-Chinese trade deficit. Since then, the two countries have exchanged several rounds of tit-for-tat trade tariffs.

Trump announced in a Twitter post last month that he would delay another planned increase in tariffs on $200 billion worth of Chinese goods that was originally set for 1 March.

Prior to that, at the G20 summit in Argentina in December, Trump and Chinese President Xi Jinping agreed upon a 90-day truce to allow room for a new trade agreement.</s>WASHINGTON — The United States imported more goods than ever last year, including a record amount from China, ballooning America’s trade deficit with the rest of the world to $891.3 billion and delivering a setback to President Donald Trump’s goal of narrowing that gap.

The increase was driven by some factors outside Trump’s control, like a global economic slowdown and the relative strength of the U.S. dollar, both of which weakened overseas demand for U.S. goods. But the widening gap was also exacerbated by Trump’s $1.5 trillion tax cut, which has been largely financed by government borrowing, and the trade war he escalated last year.

The trade deficit is the difference between how much a country sells to its trading partners and how much it buys. Trump has long boasted that his trade policies would reduce that gap, which he views as a measure of whether partners like China and the European Union are taking advantage of the United States, a diagnosis that few economists share.

Instead, in a year when Trump imposed tariffs on steel, aluminum, washing machines, solar panels and a variety of Chinese goods, the trade deficit grew by 12.5 percent from 2017, or nearly $70 billion dollars, the Commerce Department said Wednesday. The deficit in goods, which Trump particularly targets, grew to $891.2 billion for the year, its highest level in history.

In December, the overall goods and services deficit rose to $59.8 billion, up 19 percent from the previous month. It was the highest monthly trade deficit in a decade.

The United States also imported a record amount of goods from China last year, despite Trump’s trade war with China and the imposition of tariffs on $250 billion worth of Chinese goods. The trade gap in goods between the United States and China hit $419 billion in 2018, deepening a bilateral deficit that has been a particular source of anger for Trump.

The widening gap appears to reflect uneven results from the administration’s trade war with Beijing.</s>WASHINGTON — The U.S. trade deficit surged to a 10-year high in 2018, with the shortfall with China hitting a record peak and despite tariffs on a range of imported goods in an effort to shrink the gap.

The Commerce Department said Wednesday an 18.8 percent jump in the trade deficit in December had contributed to the $621.0 billion shortfall last year.

The 2018 deficit was the largest since 2008 and followed a $552.3 billion gap in 2017.

The trade deficit has deteriorated despite the White House’s protectionist trade policy, which President Donald Trump said is needed to shield U.S. manufacturers from what he has said is unfair foreign competition.

The United States last year imposed tariffs on $250 billion worth of goods imported from China, with Beijing hitting back with duties on $110 billion worth of American products, including soybeans and other commodities.

Trump has delayed tariffs on $200 billion worth of Chinese imports as negotiations to resolve the eight-month trade war continue.

The United States also has slapped duties on imported steel, aluminum, solar panels and washing machines. The goods trade deficit with China increased 11.6 percent to an all-time high of $419.2 billion in 2018.

The United States had record imports from 60 countries in 2018, led by China, Mexico and Germany.

The December trade deficit of $59.8 billion was the largest since October 2008 and overshot economists’ expectations for a $57.9 billion shortfall, as exports fell for a third straight month and imports rebounded.

The release of the December report was delayed by a 35-day partial shutdown of the government that ended Jan. 25.

When adjusted for inflation, the goods trade deficit surged $10.0 billion to a record $91.6 billion in December.

The jump in the so-called real goods trade deficit suggests that trade was probably a bigger drag on fourth-quarter gross domestic product than initially estimated by the government.</s>Confirming last week's advance goods data which saw the biggest trade deficit on record in December, moments ago the BEA reported that the U.S. trade deficit soared to a 10-year high of $621 billion in 2018, jumping by $68.8 billion, or 12.5 percent in the year, and crushing Trump’s pledges to reduce it, as tax cuts boosted domestic demand for imports while the strong dollar and retaliatory tariffs weighed on exports.

The data release was originally delayed a month by the partial government shutdown. January figures are due March 27.

Worse, for goods only, the deficit with the world surged to a record $891.3 billion in 2018 from $807.5 billion the prior year, as merchandise deficits with Mexico and the European Union also hit records. Offsetting the record good deficit was the surplus in services which kept rising, and also hit a a record - in the other direction - rising to a $270.2 billion surplus in 2018.

The reason for the massive jump in the deficit is that while exports increased $148.9 billion or 6.3% as shipments of goods including crude oil, petroleum products and aircraft engines increased. However, imports increased even more, some 7.5%, or $217.7 billion, on purchases of items from pharmaceuticals to computers, along with services such as travel.

On a monthly basis, the December deficit soared from $50.3 billion to $59.8 billion, also a 10-year high and far worse than the consensus estimate of $57.9 billion.

How did the deficit soar so much in one month? Simple: less exports, more imports, as exports fell 1.9% from the prior month, the biggest decline since early 2016, to $205.1 billion, on lower shipments of civilian aircraft, petroleum products and corn.
• 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.
• As a result, 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.

Also worth noting: the December goods deficit hit an all time high.

Ironically, the biggest culprit was China, as the deficit with Beijing - the target of Trump’s trade war - hit a record $419.2 billion in 2018, following the previously noted plunge in Chinese imports from the US.

Ironically, as Bloomberg notes, while Trump has repeatedly cited the deficit as evidence of the failure of his predecessors’ trade policies, the gap has surged by $119 billion during his two years as president. Even if he completes an accord to end the tariff war with China, substantially shrinking the deficit may prove tough as cooling global growth weighs on exports while domestic demand keeps driving shipments from abroad.
• The December goods deficit ($80.4 billion) was the highest on record.
• The December non-petroleum deficit ($79.1 billion) was the highest on record.
• December exports of foods, feeds, and beverages ($9.6 billion) were the lowest since 2010 ($9.3 billion).
• December imports of foods, feeds, and beverages ($12.6 billion) were the highest on record.
• December imports of automotive vehicles, parts, and engines ($32.1 billion) were the highest on record.
• December non-petroleum imports ($200.2 billion) were the highest on record.

And so Trump is trapped: if he concedes the trade war to China just to keep his precious stock market higher, the deficit will continue rising; if on the other hand, Trump pushes for a hard line on trade, the S&P - which has now priced in the end of the trade war - will tumble. The ball is now in Trump's court which option to choose.</s>The U.S. trade deficit increased 19-percent in December from the previous month, the single largest monthly deficit since October 2008, despite President Donald Trump's protectionist trade policies aimed at cutting the gap.

The Commerce Department reported Wednesday the global trade deficit in goods and services rose to a seasonally adjusted $59.8 billion, a $9.5 billion increase from November, pushing the full-year total to a decade-long high of $621 billion. It was the highest mark since the $709 billion deficit in 2008 during the middle of the Great Recession.

The trade deficit on goods with China, Mexico and the European Union climbed to record highs, despite Trump's imposition of tariffs last year on Chinese products and on foreign aluminum and steel.

December's trade imbalance widened because U.S. imports rose 2.1 percent, while exports to other countries dropped 1.9 percent.

Wednesday's trade deficit report follows several other weak economic reports this week, including business and construction spending, setting the U.S. economy on a low growth course in the first quarter.</s>The trade deficit between and the US decreased by USD 1.6 billion, almost seven per cent, in 2018 as compared to the previous year, according to the latest official figures.

recorded a decrease in the deficit from USD 22.9 billion in 2017 to USD 21.3 billion in 2018, according to the latest figures revealed by the Bureau of Economy Analysis on Wednesday.

The US trade deficit in goods and services increased by USD 9.5 billion from USD 50.3 billion in November to USD 59.8 billion in December, according to the figures.

For 2018, the US goods and services deficit was USD 621.0 billion, up USD 68.8 billion from USD 552.3 billion in 2017. Exports were USD 2,500.0 billion in 2018, up USD148.9 billion from 2017. Imports were USD 3,121.0 billion, up 7 billion from 2017, it said.

The figures showed that the goods deficit hit USD 891.3 billion in 2018, the largest in US history. America's goods deficit with hit a record USD 419.2 billion last year.

Opposition were quick in criticising US

"Today's announcement that the merchandise trade deficit for 2018 topped USD 891 billion shows that the has flunked the test he set for himself, said

in a statement criticised President for his polices that has resulted in a record trade deficit.

"Perhaps will now discover that tweets and bluster alone won't dramatically shrink the trade deficit," he said.

"The selective interventions of the administration on trade have been helpful to key sectors, but these actions haven't put a dent in the massive deficit. The administration's fiscal policies have helped to boost the trade deficit, as has its reluctance to engage more actively in exchange rate misalignment," he said.

"While the trade deficit results from many factors, the staggering sum represents lost opportunities for American workers and businesses," Paul said.

"If the president wants to back his words with actions, any trade deal with will insist on dramatic, structural changes in Beijing's state-led economy, which have contributed to massive industrial overcapacity in key sectors. The next few weeks of negotiations with are critical to the future of American We can't afford a deal that doesn't deliver real and lasting change," Paul said.</s>The skyrocketing US trade deficit hit the highest level in a decade last year despite President Donald Trump's global trade offensive, according to a government report Wednesday.

America's trade deficit with the world jumped 12.5 per cent to USD 621 billion, the Commerce Department reported, as both imports and exports rose to the highest levels ever.

And the trade gaps with China, Mexico and the European Union also reached at all-time highs even though Washington slapped tariffs on hundreds of billions in imports from its largest trading partners.</s>For goods only, the deficit with the world surged to a record $891.3 billion in 2018 from $807.5 billion the prior year. The merchandise deficits with Mexico and the European Union also hit records......Ironically, the biggest culprit was China, as the deficit with Beijing - the target of Trump’s trade war - hit a record $419.2 billion in 2018, following the previously noted plunge in Chinese imports from the US.</s>WASHINGTON: The skyrocketing US trade deficit last year hit the highest level in a decade, a resounding failure for President Donald Trump’s global trade offensive, government data showed Wednesday.

And America’s merchandise trade deficit — the main focus of Trump’s ire — surged to its highest level ever in 2018, as did the imbalance in goods trade with China, Mexico and the European Union — even after Washington slapped tariffs on hundreds of billions in imports from its largest trading partners.

The bulging deficit numbers come as US and Chinese officials say they are nearing a breakthrough in talks to end their trade war. Beijing is expected to offer to make eye-catching purchases of American agricultural goods to cut the trade deficit and please Trump.

Trump has angrily described trade deficits as a defeat for the United States, and aimed to erase them, but the Commerce Department report was bristling with records as Americans snapped up mobile phones and companies invested in computer equipment in 2018.

The total US goods deficit surged 10.4 percent to $891.3 billion, the highest level ever recorded.

Meanwhile, the overall trade deficit with the world , with services factored in, jumped 12.5 percent to $621 billion as both imports and exports rose to their highest levels ever, according to the report. The deficit in 2017 was $552.3 billion.

In December alone, the total deficit also vaulted past expectations, surging 18.8 percent and likely weighing on an economy which already was slowing at the close of the year.

“We expect the slowdown in global growth to continue to weigh on exports and industrial production,” Mickey Levy of Berenberg Capital Markets wrote in a note to clients.

“In particular, economic weakness in China and Europe and trade-related uncertainties are dampening trade volumes.”

In 2018, however, solid US growth, low unemployment and consumers’ thirst for foreign products drove imports of goods and services up 7.5 percent to a record $3.1 trillion in 2018.

Exports also rose, but not enough to chip away at the imbalance. Sales abroad increased 6.3 percent to $2.5 trillion last year, also the highest level ever.

And with the country is on its way to becoming a net energy exporter, crude sales abroad more than doubled to $47 billion.

But soybean exports, a crucial crop across vast expanses of the country, fell 18 percent for the year to $18.2 billion amid a Chinese boycott sparked by Trump’s trade war.

American purchases of foreign autos, computers and machinery, and consumer goods, as well as foods and animal feeds, also were the highest ever.

Imports of goods ($2.6 trillion) and services ($557.9 billion) reached new all-time highs, the report showed.

And even as Washington and Beijing have exchanged punitive tariffs on more than $360 billion in two-way trade, the US deficit with China expanded to an even larger $419.2 billion, a new record.

Trump rejects conventional economic views of trade, which hold that deficits are not always a negative for the economy as they can allow cheaper goods and services be made available to more people while promoting job creation.

The White House maintains that trade imbalances translate directly into thousands of job losses but while the tariffs protections help some companies, many others have struggled with higher prices and held off on investments amid the trade war. Some have even gone bankrupt or laid off workers as a result of the tariff battles.

While officials have projected optimism in recent weeks, details on a possible deal with China remain scarce.

The deficit with the European Union, also in a trade standoff with Washington, also rose to a record $169.3 billion, while the gap with Mexico hit a high of $81.5 billion.

EU Trade Commissioner Cecilia Malmstrom is in Washington this week and due to meet later Wednesday with US Trade Representative Robert Lighthizer as they prepare for formal negotiations.

At the same time, the United States recorded surpluses with Britain and with South and Central America.

The OECD on Wednesday cut its global growth forecast for 2019 by two tenths to 3.3 percent, citing trade tensions and political uncertainty.

Wall Street slid following the news, with major indices adding to Tuesday’s losses toward 1600 GMT.
The United States Commerce Department reports the country's 2018 trade deficit was $621 billion (£472.5 bn), the highest since 2008.