News / Economy

US trade deficit widened in August to $54.9 billion

Friday, 04 October 2019 8:32 PM [ Last Update: Friday, 04 October 2019 8:38 PM ]

Shipping containers from China and other Asian countries are unloaded at the Port of Los Angeles in Long Beach, California on September 14, 2019. (AFP photo)

The US trade deficit increased in August as imports of consumer goods surged to a record high, but the gap with China, a focus of the Trump administration’s “America First” agenda, narrowed.

The Commerce Department said on Friday the trade deficit rose 1.6% to $54.9 billion. The July trade gap was unrevised at $54.0 billion. Economists polled by Reuters had forecast the trade gap would widen slightly to $54.5 billion in August.

The politically-sensitive goods trade deficit with China fell 3.1% to $31.8 billion on an unadjusted basis, with imports declining 0.8%. Exports to China increased 8.0% in August, boosted by soybean shipments. The goods trade deficit with the European Union jumped 23.7% to $15.3 billion.

The United States and China have been embroiled in a 15-month trade war. Washington announced this week tariffs on aircraft, other industrial products and agricultural products from the EU as part of a World Trade Organization penalty award in a long-running aircraft subsidy case.

Trade experts expect the EU will impose tariffs on US goods next year over subsidies for Boeing (BA.N).

In August, goods exports rose 0.3% to $138.6 billion. They were lifted by exports of soybeans, which rose $0.3 billion.

Exports of industrial supplies and materials increased $1.5 billion, with shipments of crude oil rising $0.8 billion. But capital goods exports fell $1.4 billion, with aircraft shipments declining $1.3 billion.

Goods imports increased 0.6% to $213.0 billion in August. The import bill was boosted by a $1.9 billion surge in capital goods imports to the highest on record. Cellphone imports rose by $1.1 billion.

When adjusted for inflation, the goods trade deficit rose $0.3 billion to $85.7 billion in August. Trade could remain a drag on gross domestic product in the third quarter.

Growth estimates for the third quarter range from as a low as a 1.3% annualized rate to as high as a 1.9% pace. The economy grew at a 2.0% pace in the second quarter, slowing from a 3.1% rate in the January-March period.

(Source: Reuters)

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