The gap between America’s imports and exports with the rest of the world grew to its widest since March 2012, adding fuel to the fire of President Donald Trump’s economic nationalism.
The US imported $48.5bn more than it exported in January, an increase of $4.2bn from the previous month, according to the US Bureau of Economic Analysis.
Despite a $1.1bn increase in exports, imports grew by $5.1bn during the month, driven by mobile phones and oil.
US secretary of commerce and former businessman Wilbur Ross said “correcting this imbalance” is a central part of Trump’s “free and fair” trade agenda.
He added a further warning shot to countries with a large trade surplus with the US, saying: “In the coming months we will renegotiate bad trade deals and bring renewed energy to trade enforcement in defense of all hard-working Americans.”
Ross’s comments follow those of Trump’s trade adviser, Peter Navarro, who said the US would try to strike a bilateral trade deal with Germany, which runs the largest surplus with the US after China.
On the campaign trail one of Trump’s central contentions was that bad trade deals allowed other nations to exploit the US and steal manufacturing jobs.
Comments since the election from the new economic leaders have raised fears of protectionist policies, which could damage some sectors reliant on imports. However, Trump’s policies would involve a large change in the structure of the US economy, which would involve significant legislative action.
Kully Samra, managing director of Charles Schwab UK, said: “The jury’s still out as to what exactly is going to happen.
“Once the administration really starts to learn how difficult it is to change some of these things the tone might have to change.”
Such moderation in tone has already occurred in some policy areas – notably with regard to promises to brand China as a currency manipulator.
Meanwhile Trump’s stated desire to have a weaker dollar, which would boost US manufacturing exports, has been moderated by Treasury secretary Steven Mnuchin.