The U.S. federal government budget deficit increased by 79% in July as the country's president Donald Trump conflicts with the East and the West intensified.

IranPress/America: As US president Donald Trump's disagreement with EU on one side and China on the other side continues, The Treasury Department reported Friday that in the first 10 months of this budget year, the deficit totaled $684 billion, up 20.8 percent from the same period last year.

The U.S. federal government racked up a $76.9 billion deficit in July, with increased government spending and tax cuts keeping the country on track to record its biggest annual deficit in six years.

For the first 10 months of fiscal 2018, the shortfall totals $684 billion, according to the Treasury Department. That’s an increase of 21% compared to the same period in 2017.

Receipts fell 3% compared to last July, with the government getting less money from both corporations and individuals in the wake of the new tax law. Corporate revenues were down 34% as companies enjoyed a reduced 21% tax rate. And individuals continued to send fewer tax dollars to the Treasury, after lower withholding from paychecks took effect in February. President Donald Trump signed the law in December.

Some US officials and businesses recently have expressed grave concerns as some states severely affected by US trade war. China and some US allies hit back at US import taxes with their own tariffs on US goods. These reciprocal measures affected US businesses specially agriculture sector.   

Congressional budget analysts predict the deficit for the full year will be about 19% bigger than last year’s shortfall, the result of both the Republican tax law and spending boosts approved by lawmakers earlier this year. The Congressional Budget Office predicts trillion-dollar deficits will return in 2020.

For the current budget year, which ends Sept. 30, the administration is now projecting a deficit of $890 billion. That would be up 33.7 percent from last year's deficit of $665.8 billion.

The increases in spending for the 10-month period included $36 billion more for Social Security and $26 billion more for Medicare, the government's two biggest benefit programs, reflecting rising costs as the baby boomer generation retires. Defense spending was up $27 billion.

Interest on the national debt was up $50 billion. Half that amount went to the higher payments Treasury is making on securities that guard against increases in inflation, and the other half reflecting rising interest rates and a growing amount of debt that must be financed.

The $76.9 billion deficit for the month of July compared to a deficit of $42.9 billion in July 2017. US government has run a deficit in July in 62 of the past 64 years.

The International Monetary Fund has warned last month that global economy could lose $430 billion by 2020 if the current Sino-US trade war escalates and President Donald Trump's new tariff threats are carried out.

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