US trade deficit hits a 14-year high of $67.1 bn in August
06 October 2020
US trade deficit hit a 14-year high of $67.1 billion in August 2020, with a surge in imports in the wake of the spike in the number of coronavirus cases in the country. This is the largest trade deficit that America has seen since 2006 and prospects are that with imports continue climbing, trade could be a drag on economic growth in the third quarter.
The Commerce Department said on Tuesday the trade deficit jumped 5.9 per cent to $67.1 billion, the widest since August 2006.
Overall US Imports increased by 3.2 per cent to $239 billion with merchandise imports rising $6.5 billion to $203 billion. Exports, on the other hand, increased at a comparatively slower pace of 2.2 per cent to $171.9 billion. Merchandise exports rose $3.5 billion to $119.1 billion.
US trade deficit with China, however, decreased $1.9 billion to $26.4 billion in August, still accounting for more than 39 per cent of the total trade deficit.
So far this year, the United States has recorded a trade gap of $421.8 billion, up 5.7 percent from January-August 2019. Exports rose 2.2 per cent to $171.9 billion, but imports rose more — up 3.2 per cent to $239 billion.
US trade bill had shrunk over the last three quarters, especially after the coronarivus crisis severely disrupted trade flows, which are now picking up.
President Donald Trump had vowed 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 these have not yet started showing on America’s trade deficit. Americans are still buying more imported goods while foreign demand for US products remains weak.