U.S. trade deficit narrows

The Guardian (Charlottetown) - - BUSINESS -

The U.S. trade deficit nar­rowed in June as ex­ports hit the high­est level in 2 1/2 years.

The Com­merce Depart­ment said Fri­day that the trade gap slid 5.9 per cent in June to $43.6 bil­lion.

Ex­ports of goods and ser­vices rose 1.2 per cent to $194.4 bil­lion, the high­est amount since De­cem­ber 2014 on higher for­eign de­mand for Amer­i­can soy­beans, com­puter ac­ces­sories and other prod­ucts. Ser­vices ex­ports reached a record $65.4 bil­lion.

U.S. ex­ports may be get­ting a lift from a pickup in global eco­nomic growth and a drop in the value of the U.S. dol­lar against other cur­ren­cies. A weaker dol­lar makes Amer­i­can prod­ucts a bet­ter bar­gain in for­eign mar­kets.

Over­all im­ports slipped 0.2 per cent to $238 bil­lion on a drop in de­mand for cell­phones and other house­hold goods.

So far this year, the trade deficit is up 10.7 per cent to $276.6 bil­lion.

The deficit means the United States is buy­ing more goods and ser­vices from other coun­tries than it is sell­ing them. A shrink­ing trade gap boosts U.S. eco­nomic growth.

Pres­i­dent Don­ald Trump has vowed to bring down Amer­ica’s trade deficits, say­ing they are caused by bad trade deals and abu­sive prac­tices by China and other U.S. trad­ing part­ners. The deficit in goods with China rose 3.1 per cent in June to $32.6 bil­lion and is up 6.1 per cent to $170.7 bil­lion so far this year.

The goods deficit with Mex­ico slid 18.3 per cent in June to $6 bil­lion. The Trump ad­min­is­tra­tion is pre­par­ing to rene­go­ti­ate the North Amer­i­can Free Trade Agree­ment with Mex­ico and Canada. Trump has com­plained that NAFTA en­cour­ages U.S. man­u­fac­tur­ers to move to Mex­ico to take ad­van­tage of cheaper labour.

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