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Does a record-breaking U.S. trade deficit really matter?

In this Tuesday, March 5, 2019, file photo the Cape Kortia container ship heads into the Port of Tacoma in Commencement Bay. The U.S. trade deficit jumped nearly 19 percent in December, pushing the trade imbalance for all of 2018 to widen to a decade-long high of $621 billion. The gap with China on goods widened to an all-time record of $419.2 billion. (AP Photo/Ted S. Warren, File)
In this Tuesday, March 5, 2019, file photo the Cape Kortia container ship heads into the Port of Tacoma in Commencement Bay. The U.S. trade deficit jumped nearly 19 percent in December, pushing the trade imbalance for all of 2018 to widen to a decade-long high of $621 billion. The gap with China on goods widened to an all-time record of $419.2 billion. (AP Photo/Ted S. Warren, File) In this Tuesday, March 5, 2019, file photo the Cape Kortia container ship heads into the Port of Tacoma in Commencement Bay. The U.S. trade deficit jumped nearly 19 percent in December, pushing the trade imbalance for all of 2018 to widen to a decade-long high of $621 billion. The gap with China on goods widened to an all-time record of $419.2 billion. (AP Photo/Ted S. Warren, File)

By Associated Press 6 min read

WASHINGTON (AP) – The U.S. trade deficit reached its highest sum ever last year, defying President Donald Trump’s efforts and promises to shrink it through his economic policies. The irony is that those policies likely contributed to the deficit.

Trump entered office insisting that decades of trade gaps had crushed the U.S. economy and that he would forge new agreements that would diminish the deficits.

It hasn’t happened.

The government said Wednesday that the U.S. trade gap in goods and services reached $621 billion last year, its highest total since 2008. And the U.S. deficits in goods with China and Mexico surged to record highs.

As president, Trump’s signature effort to stimulate U.S. growth – deficit-funded tax cuts – likely helped fuel the willingness of American corporations and households to spend, including on imported goods. That is especially true at a time when much of the rest of the economic world has weakened and is less likely to buy U.S. goods. The result has been more imports than exports.