US trade deficit expanded by 8.5% to 68.3 billion USD in December 2019. However, the overall trade deficit is on track to mark its first annual decline since 2013. According to economists, the Trump administration’s America First Program, accompanied by the 18-month trade war with China, has significantly restricted the flow of goods to the United States.

Although Washington and Beijing signed a limited trade deal this month, US duties on Chinese imports worth 360 billion USD remained in place.

In December, imports of goods rose by 2.9% to 205.3 billion USD after a reported decline of 1.3% in November. A major increase was seen in the supply of industrial goods, foodstuffs, and consumer goods. However, imports of motor vehicles and their parts have decreased.

Exports of goods also increased by 0.3% last month to 137.0 billion USD, after rising 0.8% in November. There is an increase in exports of industrial and capital goods. Exports of consumer goods and motor vehicles declined, while food supplies remained unchanged.

Despite the sharp increase in the merchandise trade deficit last month, the overall trade deficit was likely to be smaller in the fourth quarter compared to the July-September period. This would be positive for the calculation of gross domestic product. The Atlanta Federal Reserve branch estimates GDP growth by 1.9% in the fourth quarter.

The Ministry of Commerce also said that retailers’ stock levels remained unchanged in December after falling 0.8% in the previous month. Inventories of motor vehicles and their parts also did not change, after falling by 1.8% in November.