The US trade deficit jumped by 12.5 per cent last year, hitting $621bn (£474bn), according to the latest figures from the Commerce Department.
The data also showed a $891bn goods trade shortfall in 2018, the biggest goods deficit on record.
The US reported these disappointing numbers in spite of efforts by Donald Trump to protect American business and trade.
Mr Trump has stirred up fears of a trade war with China over the last year, announcing a series of tariffs on Chinese goods.
The conflict sparked fears for the global economy, with the World Trade Organisation (WTO) warning that the trade spat put businesses and jobs around the world at risk.
Meanwhile, businesses likely stocked up on imports in anticipation of further duties on Chinese goods, which contributed to the deterioration in the US trade deficit last year.
The goods trade deficit with China increased 11.6 per cent to an all-time high of $419.2bn in 2018. The US, which also slapped duties on imported steel, aluminium, solar panels and washing machines, had record imports from 60 countries in 2018, led by China, Mexico and Germany.
“Perhaps Donald Trump will now discover that tweets and bluster alone won’t dramatically shrink the trade deficit,” said Scott Paul, president of the Alliance for American Manufacturing in Washington. “The administration’s fiscal policies have helped to boost the trade deficit.”
The US and China have recently made progress towards a trade truce, with Mr Trump officially suspending tariffs on $200bn of Chinese goods last week.
However, officials warned that long-term resolution is unlikely to be found for some time and economists expect exports to remain weak even if Washington and Beijing strike a trade deal.
“That will take time and if the Chinese growth is as soft as most economists believe, it is hard to see how they can ramp up demand for US products very much this year,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Additional reporting by newswires
