U.S.’ August trade gap hits widest since 2006

The U.S. trade deficit widened in August to the largest since 2006 as the nation imported a record amount of consumer goods as demand picks up ahead of the holidayshopping season.

The overall gap in trade in goods and services expanded to $67.1 billion in August from a revised $63.4 billion in July, according to Commerce Department data released Tuesday. The positive balance on services dropped to $16.8 billion.

Exports rose 2.2% to $171.9 billion on a surge in shipments of soybeans, but imports rose more — up 3.2% to $239 billion — led by purchases of crude oil, cars and auto parts. The nation’s surplus in services shrank to the lowest since 2012.

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 deficit in the trade of goods with China fell 6.7% to $26.4 billion.

The coronavirus pandemic undid some of the Trump administration’s deficit-reduction efforts that were starting to bear fruit before the virus upended demand and supply chains. American businesses, which drew down inventories at the start of the lockdown, have recently increased imports to replenish stocks ahead of the holidays.

Meanwhile, depressed economic activity abroad has led to smaller improvements in exports of goods from the world’s biggest economy. Trade volumes are higher than May’s pandemic lows, but remain depressed after the initial uptick stemming from reopening measures.

U.S. Trade Representative Robert Lighthizer, who doesn’t usually comment on the monthly data, issued a lengthy statement on the numbers in which he defended President Donald Trump’s economic record, saying the latest deficit increase reflected imports of gold for “risk-hedging strategies,” while the goods gap with China narrowed.

“The trade data released today reflect the effects of the coronavirus on the U.S. and our trading partners. Basically, many of our partners were more negatively affected by the pandemic than we were,” he said. “As other countries recover and reopen, we expect both imports and exports to improve substantially.”

Together, the value of U.S. exports and imports climbed to almost $411 billion, still well below pre-pandemic levels.