On Jan. 29, Trump signed a new trade pact with Canada and Mexico into law, extending the life of the trading bloc created by Nafta in the 1990s with some significant updates. The White House is now turning its attention to scrutinizing trade links with other nations and regions including the U.K., Africa and the European Union, with whom relations started to sour in 2018 when the Trump administration invoked national-security considerations to impose tariffs on steel and aluminum from Europe.
Trump said Tuesday in his State of the Union address that his tariff strategy with China has worked. The agreement with China will protect U.S. workers and intellectual property, open markets and “bring billions and billions of dollars into our Treasury,” he said.
Paying Tariffs
Under the tariffs, U.S. companies importing goods from China are paying the levies that flow to the Treasury. That forces firms to decide how to take a hit to profits, shift supply chains or pass along price increases to customers.
As a share of the economy, the overall trade gap narrowed to 2.9% of gross domestic product from 3% in 2018. It’s still significantly smaller than in the decade before the last recession, when it approached 6%.
For the full year, exports fell 0.1% to $2.5 trillion as shipments of civilian aircraft declined amid the grounding of Boeing Co.’s 737 Max plane, while sales of autos, consumer goods and petroleum gained. Imports fell 0.4% to $3.12 trillion on lower purchases of crude oil, computer accessories and telecommunications equipment.
This article was provided by Bloomberg News.