The US economy continue stronger than expected. The U.S. trade deficit in goods is widest gap in three months in January, according to data released Wednesday by the Commerce Department. 

That month, imports surged by 3% to $325.8 billion, exports rose by 3.4% to $257.5 billion.

The main driver of the trade deficit’s expansion is the U.S. strong economy. Another factor is the continuing supply chain disruptions have resulted in slower production and higher costs for domestic manufacturers, making imports more appealing.

The strength of dollar is likely restricted export. “This makes imports relatively less expensive for U.S. businesses and consumers,” said Adam S. Hersh, a senior economist at the Economic Policy Institute, a nonprofit think tank based in Washington. “It also makes U.S. exports relatively more expensive for foreign businesses and consumers.”

But new restriction by Biden administration may change that. 

The data also indicates that many U.S. companies have been unable to reduce their dependence on China, even though the U.S. government has imposed more trade barriers. In 2022, the trade deficit with China increased by $29.4 billion, to $382.9 billion, the second-highest total on record. This trend continued into January, with a steady rise in both import and export volumes.

Kei Yu Yeung has been working as a customer liaison at a battery factory in Shenzhen in South China since graduating from college in 2018. The factory, which employs around 40 people, sells more than half of its products to the United States through Amazon.

But the Biden administration’s “Chips for America” program, announced March 1, restricts some chip companies from trading with China. 

Yeung’s factory is already felling the effect of Biden administration chips American program. “The restrictions are definitely there.  we make RV battery that requires chips,” She added that Biden’s policy had increased production costs. “But the U.S.-China relationship can’t be entirely decoupled, at least in this industry, our production is too significant.”

Some ecumenists argue the Biden’s policy will limited.

 “You have a trend that’s two decades long and can’t be handed right away, “Christopher S. Rupkey, chief economist at FWDBONDS LLC, said The U.S. and China were still very much tied together by trade: “We’re still going to be reliant on Chinese goods despite the rising geopolitical risks.”

Imports of consumer goods spiked by $4.1 billion, with imports of motor vehicles, parts and engines hitting a record high in January. Meanwhile, with exports of consumer goods increasing by 6.0%, to $177.8 billion, and capital goods reaching a new high .

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