The Commerce Department has revealed that the U.S. goods trade deficit jumped 12.5 percent in 2018 to a record $891.3 billion. The overall trade deficit also jumped 12.5 percent in 2018 to $621 billion, which is the largest it has been since 2008.
Despite the fact that President Trump promised to lower the deficit through fairer trade deals with foreign countries, associate professor of economics at the King’s College, Brian Brenberg said a rising deficit means that the U.S. economy is much stronger than other nations around the world.
“If you’re critiquing the president for a rising trade deficit, you’re also giving him credit for a really strong economy,” he told FOX Business’ Kennedy. “The two go together.”
Brenberg said because of the boosted economy, consumers spend more money on imports.
“By the same token, investors want to invest in the United States… that pushes up the value of our currency and makes imports for us cheaper, so we continue to buy more,” Brenberg said.
However over the long term, a trade deficit could become a problem if you have trade barriers, he added.
But in regards to the federal deficit, Brenberg said despite rhetoric Trump isn’t asking for much.
“[What Trump is] actually asking for [is] a 5 percent cut on non-defense discretionary spending,” he said. “That sounds big and ugly right? It means about one-sixth of our budget he wants to cut by 5 percent. That’s nothing!”