Trade Gap Widens More Than Expected: Expect More Trump Howls

Economists expected the trade gap to increase, but the results were even worse, with falling exports the main culprit.

The Commerce Department International Trade report for January shows the US trade deficit with the rest of the world increased to $-56.6 billion from a revised higher $55.1 billion in December.

Trade Highlights

  • January exports were $200.9 billion, $2.7 billion less than December exports.
  • January imports were $257.5 billion, down less than $0.1 billion from December imports.
  • The January increase in the goods and services deficit reflected an increase in the goods deficit of $2.8 billion to $76.5 billion and an increase in the services surplus of $0.1 billion to $19.9 billion.
  • Year-over-year, the goods and services deficit increased $7.9 billion, or 16.2 percent, from January 2017. Exports increased $9.7 billion or 5.1 percent. Imports increased $17.6 billion or 7.4 percent.

Goods Exports

Exports of goods on a Census basis decreased $3.3 billion.

  • Capital goods decreased $2.6 billion.
  • Industrial supplies and materials decreased $1.3 billion.
  • Other goods decreased $1.0 billion.
  • Consumer goods increased $1.2 billion (Artwork, antiques, stamps, and other collectibles increased $0.5 billion. Pharmaceutical preparations increased $0.4 billion.)

We are exporting more antiques. Lovely. That will get the economy humming.

Goods Imports

Imports of goods on a Census basis decreased $0.3 billion.

  • Capital goods decreased $1.3 billion.
  • Consumer goods decreased $0.9 billion. (Cell phones and other household goods decreased $1.2 billion).
  • Industrial supplies and materials increased $2.0 billion.

Goods by Selected Countries and Areas

  • The January figures show surpluses, in billions of dollars, with Hong Kong ($2.6), South and Central America ($2.4), Singapore ($0.9), Brazil ($0.5), and United Kingdom ($0.3).
  • Deficits were recorded, in billions of dollars, with China ($35.5), European Union ($15.0), Germany ($6.3), Mexico ($5.6), Japan ($5.6), Italy ($2.8), OPEC ($2.5), India ($1.8), Taiwan ($1.5), Canada ($1.5), South Korea ($1.5), France ($1.4), and Saudi Arabia ($0.6).

The Econoday consensus was for the trade deficit to widen to $-55.1 billion from $53.1 billion. The consensus range was $-56.1 billion to $-52.8 billion. The report was outside the range. Trump will howl.

It's shocking, but somehow Econoday did not find hidden strength in antiques.


Let's invade Canada over that $1.5 billion. We need to go after Italian shoes too. To hell with it. Just stop all imports and export more antiques and drugs.

Mike "Mish" Shedlock

No. 1-14

Examining the impact by state, CNN shows that in Ohio alone, the steel tariff will help protect 11,400 workers in the steel and aluminum industries, but will put at risk 410,300 jobs in industries that use aluminum and steel in manufacturing finished products.


Sorry whirlaway. There isn’t anything different about the transition from a manufacturing economy to a technological one. There will always be winners and losers. You want to artificially prop up the losers. Perhaps you want to put everyone back to work on the farms as well. I’m afraid it is you who is in denial about how the world works.


Well. They are panic buying steel now.


Another bogus argument. The manufacturing jobs were taken up by the very people who were displaced by the modernization of agriculture. The same is not true in case of the tech jobs replacing manufacturing jobs. One, the new jobs are in distant places (how many of these jobs are in the Rust Belt?) and they are being held by people other than those who were displaced.

That is what makes this crisis fundamentally different. Those who want to wish it away or think they can whistle their way through it are just now being surprised by the consequences of what has happened. They are in for more surprises in the future. And they will have only their denial and arrogance to blame for it.


Thanks Mish. Will there even be many jobs left in manufacturing, anywhere in the world, in 20 years? Just like farming went from 90% to 2%, manufacturing will go from 32% (1953) to 8.5% (today) to 2% (in 20 years). Trying to protect or bring back these jobs is an exercise in futility. Trying to blame this on other countries is misplaced anger. But hey, if it gets you elected....