WASHINGTON (Reuters) – The U.S. trade deficit fell for the first time in six years in 2019 as the White House’s trade war with China curbed the import bill, keeping the economy on a moderate growth path despite a slowdown in consumer spending and weak business investment.
The report from the Commerce Department on Wednesday also showed the Trump administration’s “America First” agenda decreased the flow of goods last year, with exports posting their first decline since 2016. President Donald Trump, who has dubbed himself “the tariff man,” has pledged to shrink the deficit by shutting out more unfairly traded imports and renegotiating free trade agreements.
Trump has argued that substantially cutting the trade deficit would boost annual economic growth to 3% on a sustainable basis. The economy has, however, failed to hit that mark, growing 2.3% in 2019, which was the slowest in three years, after expanding 2.9% in 2018.
With tensions in the 19-month U.S.-China trade war easing, last year’s narrowing in the deficit is unlikely to be repeated.
“Since that entire drop came from the huge change in the China deficit, don’t expect further declines in the years to come,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
The trade deficit dropped 1.7% to $616.8 billion last year, declining for the first time since 2013. That represented 2.9% of GDP, down from 3.0% in 2018.
Goods imports plunged 1.7% last year, also the first decrease in three years. The United States imported 2.4 billion barrels of crude oil, the fewest since 1992, as the country significantly reduced its dependence of foreign oil amid a surge in production and exploration.
It also imported fewer capital and other goods. The 1.3% tumble in exports was le