Washington, Feb 6 (IANS) For the first time in six years, the US trade deficit in goods and services has declined in 2019, falling by 1.7 per cent due to the uneven reduction in both imports and exports amid the trade and tariff war and slower global growth.
The accumulated trade deficit during 2019 was $616.8 billion, the lowest registered since 2013, reports Efe news.
In its report released on Wednesday, the Department of Commerce said that last year US exports fell by 0.1 per cent to $2.5 trillion, while imports declined by 0.4 per cent to $3.1 trillion.
Although the overall deficit declined in 2019, in December the monthly deficit grew by 12 per cent to $48.9 billion.
The big contributor to the decline in the trade deficit last year was the reduction in the trade imbalance in goods with China, with that figure falling by 17.6 per cent to $345.6 billion, with declines in both imports – by 16.2 per cent – and in exports (11.3 percent) within the framework of the ongoing trade war between Washington and Beijing.
The figures were released after iPresident Donald Trump last month touted the conclusion of the “first phase” of a trade pact with China as a victory, an agreement whereby the two parties are seeking to reduce bilateral trade tensions and tit-for-tat rounds of tariff hikes on each others goods.
The dispute between the two largest economies in the world has consequences far beyond US and Chinese borders and both countries have seen their growth rates reduced in recent months.
The US economy slowed down in 2019 to a 2.3 per cent growth rate from 2.9 per cent in 2018.
Meanwhile, China’s GDP rose by 6 per cent (on an interannual basis) in the third quarter, the worst quarterly figured to be announced since March 1992, when Beijing began officially reporting such data.
In addition, Trump managed to deliver on another of his big promises: signing the new North American trade pact with Canada and Mexico, known as the USMCA and designed to replace the North American Free Trade Agreement (NAFTA).
Nevertheless, the US trade deficit with Mexico hit an historic high in 2019 of $101.8 billion, $21.1 billion more than in 2018.
In its latest forecasts, the International Monetary Fund predicted that the moderation in US growth would continue, coming in at 2 per cent in 2020 after showing 2.3 per cent growth in 2019, and being further dampened in 2021 to 1.7 per cent.
The numbers for China, despite the deceleration in its growth rate noted by the IMF, are still far above those for most other countries, and the forecast is for 6 per cent growth in 2020 and 5.8 per cent in 2021.