The Commerce Department released a report on Wednesday showing the U.S. trade deficit widened by more than anticipated in the month of December, with imports jumping and exports slumping. The gap between US imports and exports hits a 10-year high despite the president’s reduction plan.
The Commerce Department said the trade deficit widened to $59.8 billion in December from a revised $50.3 billion in November.
Economists had expected the deficit to widen to $57.9 billion from the $49.3 billion originally reported for the previous month.
The substantial monthly increase drove the U.S. trade deficit to its highest level since reaching $60.2 billion in October of 2008.
The trade deficit for 2018 was also the biggest since 2008, widening to $621.0 billion from $552.3 billion in 2017 as President Donald Trump ramped up his trade war with China.
The significantly wider trade deficit in December came as the value of imports surged up by 2.1 percent to $264.9 billion, while the value of exports tumbled by 1.9 percent to $205.1 billion.
While imports of capital and consumer goods showed notable increases, exports of petroleum products and civilian aircraft fell sharply during the month.
Andrew Hunter, Senior U.S. Economist at Capital Economics said the data “confirms that net trade was a drag on GDP growth in fourth quarter,” adding, “We expect that drag to intensify in the first quarter.”