U.S. trade gap grew to US$54B in September
Despite President Trump's tariffs on imported steel and aluminum and on Chinese goods, the U.S. deficit so far this year is up 10.1 per cent to $445.2 billion
WASHINGTON – Record imports expanded the U.S. trade deficit for the fourth straight month in September, as the politically sensitive trade deficit in goods with China hit a record.
The Commerce Department said Friday that the gap between what America sells and what it buys abroad climbed to US$54 billion, up 1.3 per cent from $53.3 billion in August and the highest level since February.
Imports climbed 1.5 per cent to a record $266.6 billion, led by an influx of telecommunications equipment and clothing. Exports also rose 1.5 per cent to $212.6 billion, led by increases in shipments of civilian aircraft and petroleum products.
President Donald Trump has made a priority of reducing America’s huge, persistent trade deficits. Despite his tariffs on imported steel and aluminum and on Chinese goods, the deficit so far this year is up 10.1 per cent to $445.2 billion. The goods deficit with China rose by 4.3 per cent in September to a record $40.2 billion.
China and other countries have counterpunched with import taxes on American products. U.S. exports of soybeans, targeted for retaliatory tariffs by China, dropped 29.4 per cent in September.
Trump sees the lopsided trade numbers as a sign of U.S. economic weakness and as the result of bad trade deals and abusive practices by U.S. trading partners, especially China.
Mainstream economists view trade deficits as the result of an economic reality unlikely to yield to changes in trade policy: Americans buy more than they produce, and imports fill the gap. The strong U.S. economy also encourages Americans to buy more foreign products.
U.S. exports are also hurt by the American dollar’s role as the world’s currency. The dollar is usually in high demand because it is used in so many global transactions. That means the dollar is persistently strong, raising prices of U.S. products and putting American companies at a disadvantage in foreign markets.
In September, the U.S. ran a $23.2 billion surplus in the trade of services such as banking and tourism. But that was offset by a $77.2 billion deficit in the trade of goods such as cellphones and cars.