U.S. Trade Deficit Again Hits New Record; Trump’s Trade War Failing

Trump losing
Container ship at the Port of Los Angeles, California
(Photo: Reuters)

The United States' goods and services deficit with China increased to $40.2 billion in September, the highest on record on a non-seasonally adjusted basis. Year to date, the U.S. is running a $301.4 billion deficit with China, another indication Trump's trade war isn't denting its massive deficit with China.

Worldwide, the United States' international trade deficit soared to a record high $54 billion in September. This unexpected jump was a surprising 1.3 percent increase, or $700 million, compared to August.

It was an even more stunning 10.1 percent jump compared to September 2017, according to a statement from the U.S. Bureau of Economic Analysis and the Bureau of Census.

The goods and services deficit was larger than expected in September despite the harmful trade war launched by the Trump administration against the rest of the world. It rose from $53.3 billion in August (revised) to $54.0 billion in September due to imports increasing more than exports. The August deficit was $53.2 billion.

The goods deficit increased to $77.2 billion in September, up $0.6 billion from August. On the other hand, the services surplus was reduced by $0.1 billion to $23.2 billion in September.

Exports of goods and services rose $3.1 billion (1.5 percent) in September to $212.6 billion. Exports of goods jumped $2.9 billion while exports of services edged upwards by $0.3 billion.

The increase in exports of goods was caused mostly by more shipments of industrial supplies and materials ($2.8 billion) and capital goods ($1.1 billion). A decrease in foods feeds, and beverages ($1.0 billion) somewhat offset the increases.

Imports of goods and services advanced by $3.8 billion (1.5 percent) in September to $266.6 billion. Imports of goods saw a rise of $3.5 billion while imports of services inched upwards by $0.4 billion.

The increase in goods imports mostly reflected increases in capital goods ($2.4 billion) and in consumer goods ($2.0 billion). A decrease in automotive vehicles, parts, and engines ($0.6 billion) offset the increases somewhat. The rise in imports of services reflected an increase in transport ($0.4 billion).

These numbers come as president Donald Trump has expressed hope his upcoming talks with Chinese President Xi Jinping can mitigate the trade war Trump started in the first place.

From January to September, America's global trade deficit has increased to $40.7 billion, the result of a $143.8 billion increase in imports and a $184.5 billion rise in imports. On a three-month average, the goods and services shortfall rose 5.6 percent year-on-year.

© 2018 Business Times All rights reserved. Do not reproduce without permission.