Washington: The trade deficit between India and the US has decreased by nearly seven per cent to USD 1.6 billion in 2018 as compared to the previous year, according to the latest official figures, days after President Donald Trump said he intends to end the preferential trade status granted to New Delhi.
India recorded a decrease in the deficit from USD 22.9 billion in 2017 to USD 21.3 billion in 2018, according to the latest figures revealed by the Bureau of Economy Analysis on Wednesday. The US trade deficit in goods and services increased by USD 9.5 billion from USD 50.3 billion in November to USD 59.8 billion in December, according to the figures.
For 2018, the US goods and services deficit was USD 621.0 billion, up USD 68.8 billion from USD 552.3 billion in 2017. Exports were USD 2,500.0 billion in 2018, up USD148.9 billion from 2017. Imports were USD 3,121.0 billion, up USD 217.7 billion from 2017, it said.
The figures showed that the goods deficit hit USD 891.3 billion in 2018, the largest in US history. America’s goods deficit with China hit a record USD 419.2 billion last year. Opposition Democratic party were quick in criticising President Trump.
“Today’s announcement that the merchandise trade deficit for 2018 topped USD 891 billion shows that the President has flunked the test he set for himself,” said House Majority Leader Steny H Hoyer.
Alliance for American Manufacturing president Scott Paul in a statement criticised President Donald Trump for his polices that has resulted in a record trade deficit.
“Perhaps Donald Trump will now discover that tweets and bluster alone won’t dramatically shrink the trade deficit,” he said.
“The selective interventions of the administration on trade have been helpful to key sectors, but these actions haven’t put a dent in the massive deficit. The administration’s fiscal policies have helped to boost the trade deficit, as has its reluctance to engage more actively in exchange rate misalignment,” he said.
“While the trade deficit results from many factors, the staggering sum represents lost opportunities for American workers and businesses,” Paul said.
“If the president wants to back his words with actions, any trade deal with China will insist on dramatic, structural changes in Beijing’s state-led economy, which have contributed to massive industrial overcapacity in key sectors. The next few weeks of negotiations with China are critical to the future of American manufacturing. We can’t afford a deal that doesn’t deliver real and lasting change,” Paul said.
The announcement of scrapping of preferential trade status for India could be seen as a major setback to bilateral trade ties.
President Trump notified Congress on Wednesday of his ‘intent to terminate’ trade benefits for India and Turkey under the Generalised System of Preferences (GSP) eligibility criteria. Under the United States GSP programme, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.
India was the largest beneficiary of the programme in 2017 with USD 5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with USD 1.7 billion in covered imports, according to a Congressional Research Service report issued in January.