U.S. TRADE DEFICIT AT 14-YEAR HIGH
Gap climbs 5.9% to $67.1B in August amid coronavirus pandemic
The U.S. trade deficit rose in August to the highest level in 14 years.
The Commerce Department reported Tuesday that the gap between the goods and services the United States sells and what it buys abroad climbed 5.9 percent in August to $67.1 billion, highest since August 2006. Exports rose 2.2 percent to $171.9 billion on a surge in shipments of soybeans, but imports rose more — up 3.2 percent to $239 billion — led by purchases of crude oil, cars and auto parts.
The U.S. deficit with the rest of the world in the trade of goods such as airplanes and appliances set a record $83.9 billion in August. The United States ran a surplus of $16.8 billion in the trade of services such as banking and education, lowest since January
2012.
The politically sensitive deficit in the trade of goods with China fell 6.7 percent to $26.4 billion.
So far this year, the United
States has recorded a trade gap of $421.8 billion, up 5.7 percent from January-August 2019.
Hammered by the coronavirus and its fallout on the world economy, total U.S. trade — exports plus imports — is down 15.1 percent so far this year to $3.2 trillion.
“Overall, trade f lows remain subdued and the outlook is uncertain given a muted global growth and demand backdrop,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
President Donald Trump campaigned on a pledge to bring down America's persistent trade deficits. He imposed taxes on imports of steel, aluminum and most products from China, among other things; and renegotiated a North American trade pact in an effort to encourage more production in the United States.
But the trade deficit won't yield easily to changes in trade policy. As the U.S. economy recovers from springtime shutdowns, Americans are buying more imported goods while foreign demand for U.S. products remains weak.