In a separate paper published on Sunday four economists, including Pinelopi Goldberg, the World Bank's chief economist and a former editor-in-chief of the prestigious American Economic Review, put the annual losses from the higher cost of imports alone for the USA economy at $68.8 billion, or nearly 0.4 percent of gross domestic product.
In December, the overall goods and services deficit rose to $59.8 billion, up 18.8 percent percent from November, in the largest monthly deficit since 2008.
China and the United States are nearing the finish line on a trade deal that could be signed by Presidents Donald Trump and Xi Jinping as early as this month, though there is still a risk either side could walk away. Even Trump's attempts to deal with currency issues in trade negotiations with China-or his public complaints about a strong dollar-seem unlikely to change anything. The U.S. goods trade deficit with China hit a record $419.2 billion in 2018.More news: LeBron James flirts with triple-double, Lakers lose to Suns | NBA Highlights
At the same time, the United States recorded surpluses with Britain and with South and Central America.
For the full year, exports rose 6.3 percent to $2.5 trillion as shipments of goods including crude oil, petroleum products and aircraft engines increased.
As cash-flush businesses and consumers increased their spending, purchases of imported goods rose while the overvalued dollar weighed on exports. Yet evidence is growing that the US economy is a net loser so far. "Analysts should expect higher deficits in the months ahead as global growth slows, and the economic expansion in the USA continues at an above-trend pace". Net exports had only been a small drag in last week's initial estimate for fourth-quarter GDP but today's report is pointing to a more significant one. Nominal goods exports to China tanked by 33% year-over-year in December, likely as a result of China's retaliatory tariffs on US goods.
Also, the dollar strengthened against other currencies in the latter part of 2018, making foreign goods more affordable for Americans.More news: Two girls missing from Benbow in Humboldt County
The tariffs he threatened and then imposed on Chinese imports caused a rush by importers to get ahead of the new duties that fuelled an increase in incoming traffic at West Coast ports past year.
The studies are the most authoritative yet to document the negative effect of Trump's tariffs on the USA economy, though others have shown the negative consequences. And the U.S. registered the largest trade deficit in goods in its history, growing by 10% to more than $891bn past year.
Wednesday's figures illustrated how the trade war boosted the trade deficit with China: merchandise exports to the Asian nation fell $9.6 billion previous year, while imports rose $34 billion. For the European Union, by comparison, exports and imports both surged, though imports posted a larger gain.More news: Michael Jackson reportedly 'married' boy, 10, in mock ceremony