Trade deficit rises to record $71.1 billion in February

The U.S. trade deficit rose to its highest monthly level on record in February, hitting $71.1 billion, a 4.8 percent increase from the previous record set in January.

While trade activity was generally lower than in the previous month, the level of exports fell nearly three times as much as the level of imports.

The figures for 2021 thus far are a whopping 68.6 percent higher than the first two months of last year, before the pandemic took hold.

In some regards, the deficit is a sign of the relative strength of the U.S. economy, where strong fiscal stimulus has boosted demand for goods and services above levels seen overseas.

The data represent a bitter legacy for former President Trump, who railed against the trade deficit in his 2016 campaign for the presidency, and started a slew of trade wars to renegotiate the terms of trade between America and its trading partners.

Biden’s trade representative, Katherine Tai, has signaled that she will keep many of the tariffs in place until negotiated settlements can be reached with trade partners, though the administration has already deescalated tensions and suspended some barriers with Europe and the United Kingdom.

Economists say that trade deficits are not inherently bad for the economy, but can be a sign of global imbalances or stalling economic productivity.

They have also become a political talking point in recent years, which could raise pressure on the Biden administration to enact policies that would rein in the trade deficit.