Demand for US goods overseas was lower in June with the country's trade deficit with other nations registering a 7-per cent increase over May on the back of strong US dollar, according to latest data released by the commerce department.
The goods and services deficit in June was $43.8 billion, up $2.9 billion from $40.9 billion in May. The impact of goods deficit of $63.5 billion was lessened by services surplus of $19.7 billion.
Exports in June were marginally lower in May at $188.6 billion, less by 0.1 billion, while imports were up by 1.2 per cent to $232.4 billion, $2.8 billion more than in May.
Export of goods decreased $0.2 billion to $127.6 billion in June, while export of services increased $0.1 billion to $61 billion.
The strong dollar has restrained US manufactures' exports as their products became costlier in the international market. The currency has risen about 14 per cent against major world currencies in the past one year.
Imports of goods increased $2.7 billion to $191.1 billion in June and imports of services rose $0.1 billion to $41.4 billion, an indication of strong consumer spending. Consumer spending rose 2.9 per cent in the second quarter from 1.8 per cent in the previous quarter.
The biggest trade deficit for June was recorded with China that was $28.9 billion, although lower than May's $30.6 billion.
With the European Union the trade gap was $13.9 billion led by Germany with $6.8 billion, followed by Italy with $2.2 billion and France $1.7 billion.
The trade deficit with other major partners were, Mexico $5.4 billion, Japan $5.2 billion and Canada $3.1 billion.
Trade with India also registered a $1.6-billion deficit.
In contrast, trade with South and Central America posted surpluses of $3.5 billion and also OPEC nations.
The US trade deficit has been volatile so far this year. It shot up to a three-year high of $50.6 billion in March hit by lower exports, from $37.2 billion in February.
Nevertheless, the gap narrowed in the second quarter compared with the March quarter.
International trade contributed 0.1 per cent to the Q2 GDP of 2.3 per cent in contrast to 2 per cent deduction in Q1 when the economy posted a lackluster 0.6-per cent growth.
The US has been engaged in trade talks with 11 nations in the Pacific region to boost trade between the nations, although last week's negotiations in Hawaii failed to make any break through decisions.
Nevertheless, the US secretary of state John Kerry said on Tuesday that ''good progress'' was made in the talks and the Trans-Pacific-Partnership (TPP) members were pressing on to work through tough negotiations on even the most sensitive issues.
The talks could yield freeing up an area covering 40 per cent of the global economy. The contentious areas include Japanese auto trade with North America, New Zealand's dairy trade among others.