(CN) — The nation’s trade deficit with foreign countries rose to its highest level in a decade in October, driven by record imports, the Commerce Department said Thursday.
According to the government, the gap between the United States sells and what it buys from other nations 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 percent to a record $43.1 billion. The goods gap with the European Union widened 65.5 percent to a record $17.6 billion.
Led by shipments of medicine and cars, overall imports rose 0.2 percent to a record $266.5 billion. Exports fell 0.1 percent to $211 billion.
President Donald Trump campaigned on a pledge to slash America’s longstanding trade deficit with the rest of the world, but so far, that hasn’t happened.
For instance, despite his import taxes on steel, aluminum and Chinese goods, the deficit so far this year is running 11.4 percent above January-October 2017.
In the meantime, U.S. exports of soybeans, targeted for retaliatory tariffs by China, dropped 46.8 percent in October.
Trump 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 tamporary pause in the trade dispute, but the details remain unclear and that’s roiled financial markets worldwide.
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.
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.
The Associated Press contributed to this report.