Tariff efforts fail to shrink US trade deficit

The US trade deficit came down by just 0.2% in December from the previous year, despite the Trump administration’s decision to increase tariffs to reduce reliance on goods produced in other countries.

The Commerce Department reported that the goods and services deficit reached $70.3 billion in December, up $17.3 billion from November. The figure also came in well above the $55.5 billion estimate from Dow Jones.

Exports rose 6% last year, while imports increased nearly 5%. Analysts attribute it partly to firms rushing to build inventory before tariffs take effect.

However, the trade deficit with China dropped nearly 32% to $202 billion. But it shifted elsewhere. The gap with Taiwan doubled to $147 billion, and with Vietnam it surged 44% to $178 billion. Trade with Vietnam and Mexico also increased.

But corporate profits are under pressure
A recent study by the Federal Reserve Bank of New York, backed by JPMorgan, found that US companies and consumers bore 90% of the tariff costs.

Today, the Supreme Court will decide on the legality of the tariffs.