Larry Kudlow, White House economic adviser, on widening trade deficit: ‘Neither good nor bad’
Larry Kudlow, a top economic adviser to President Trump, on Sunday characterized a widening U.S. trade deficit — which included a record trade gap in goods of $891 billion last year — as neither good nor bad.
“You have incentives for investment and economic growth. The U.S. is bound to have a trade deficit in goods with the rest of the world [because] we’re growing much faster than they’re growing and so we’re buying more of their goods,” Mr. Kudlow said on “Fox News Sunday.”
The Commerce Department reported last week that the U.S. trade deficit grew to $621 billion last year, which was the highest level since 2008.
“On the other hand, we have [a] trade surplus on services and we have a surplus on investment income coming into the USA so I don’t want to get too hung up on that,” Mr. Kudlow said. “It’s neither good nor bad. It just is. But we have to have tough, reciprocal trading policies with our neighbors.”
Mr. Kudlow noted the renegotiated 1990s-era trade deal with Canada and Mexico, which Congress still needs to approve.
The deficit in goods with China was also $419 billion, an almost 12 percent increase from the prior year.
Mr. Kudlow said they are “making a lot of headway” in trade talks with China.
“So I think his trade policies are succeeding. He’s been tough, and sometimes he will use tariffs, something that I’ve learned that can bring people to the table,” the economic adviser said.