WASHINGTON – Record imports in October drove the U.S. trade deficit to the highest level in a decade.
The Commerce Department said Thursday that the gap between the United States sells and what it buys from foreign countries hit $55.5 billion in October, the fifth straight increase and highest since October 2008.
The politically sensitive deficit in the trade of goods with China rose 7.1% to a record $43.1 billion. The goods gap with the European Union widened 65.5% to a record $17.6 billion.
Led by shipments of medicine and cars, overall imports rose 0.2% to a record $266.5 billion. Exports fell 0.1% to $211 billion.
President Donald Trump campaigned on a pledge to slash America's longstanding trade deficit with the rest of the world. Despite his import taxes on steel, aluminum and Chinese goods, the deficit so far this year is running 11.4% above January-October 2017.
U.S. exports of soybeans, targeted for retaliatory tariffs by China, dropped 46.8% in October.
Trump sees the lopsided trade numbers as a sign of U.S. economic weakness and as the result of bad trade deals and abusive practices by U.S. trading partners, especially China.
He has slapped tariffs on $250 billion worth of Chinese imports in a dispute over the tactics Beijing is using to challenge American technological supremacy. These include the theft of trade secrets and forcing U.S. companies to hand over technology in exchange for access to the Chinese market, the U.S. charges.
In a meeting over the weekend, Trump and Chinese President Xi Jinping agreed to a ceasefire in the trade dispute. Details are unclear, but the White House says it agreed to delay a planned tariff increase on $200 billion in Chinese goods for 90 days to buy time for more substantive negotiations.
Mainstream economists view trade deficits as the result of an economic reality unlikely to yield to changes in trade policy: Americans buy more than they produce, and imports fill the gap. The strong U.S. economy also encourages Americans to buy more foreign products.
U.S. exports are also hurt by the American dollar's role as the world's currency. The dollar is usually in high demand because it is used in so many global transactions. That means the dollar is persistently strong, raising prices of U.S. products and putting American companies at a disadvantage in foreign markets.
In October, the U.S. ran a $22.6 billion surplus in the trade of services such as banking and tourism. But that was offset by a record $78.1 billion deficit in the trade of goods such as cellphones and machinery.