US Trade Gap Rises The Most in 3 Years

The US trade deficit widened by 9.5 percent to USD 50.1 billion in July of 2018 from a downwardly revised USD 45.7 billion in the previous month and slightly below market expectations of USD 50.3 billion. It is the highest trade gap in five months as imports hit a new record high and exports of soybeans and civilian aircraft fell sharply.
BEA | Joana Taborda | 9/5/2018 2:02:29 PM
Total exports slumped 1 percent month-over-month to USD 211.08 billion, following a 0.7 percent drop in June. Exports of goods decreased USD 2.3 billion to USD 140.8 billion, mainly due to lower sales of capital goods (USD -0.9 billion); civilian aircraft (USD -1.6 billion); foods, feeds, and beverages (USD -0.9 billion); soybeans (USD -0.7 billion); other goods (USD -0.5 billion). On the other hand, exports of services increased USD 0.2 billion to USD 70.3 billion: charges for the use of intellectual property rose USD 0.1 billion; other business services, which includes research and development services; professional and management services; and technical, trade-related, and other services, went up USD 0.1 billion.

Total imports increased 0.9 percent month-over-month to a record high value of USD 261.16, after rising 0.7 percent in June. Imports of goods went up USD 1.9 billion to USD 213.9 billion, boosted by purchases of capital goods (USD 0.7 billion); computers increased (USD 0.5 billion); computer accessories (USD 0.3 billion); other goods increased (USD 0.7 billion); industrial supplies and materials (USD 0.5 billion); fuel oil (USD 0.3 billion); crude oil (USD 0.3 billion); automotive vehicles, parts, and engines (USD 0.5 billion). On the other hand, imports fell for consumer goods (USD -0.8 billion); pharmaceutical preparations (USD -1.3 billion). Imports of services increased USD 0.3 billion to USD 47.2 billion: travel (for all purposes including education) increased USD 0.2 billion and other business services went up USD 0.1 billion.

According to unadjusted data, exports fell to China (-7.7 percent); Canada (-10 percent), the EU (-15.7 percent) and OPEC (-16.6 percent) but rose to Mexico (2.2 percent) and Japan (1.9 percent). Imports increased from all major partners: China (+5.6 percent); the EU (3.5 percent); Japan (2.4 percent) and OPEC (11.5 percent) while it declined from Mexico (-4.7 percent) and Canada (-5.2 percent):

The goods trade deficit with China rose 10 percent to a record of USD 36.8 billion. The trade deficit also increased with the EU (+50 percent to a record of USD 17.89 billion), Japan (+2.9 percent to USD 5.46 billion), OPEC (+90 percent to USD 3.45 billion) and Canada (+57.6 billion to USD 3.15 billion) but fell with Mexico (-25 percent to USD 5.54 billion). 

Considering the first seven months of the year, the goods and services deficit increased 7 percent, with exports rising 8.6 percent and imports 8.3 percent. The US trade deficit increased with all main trading partners except Canada (-3.6 percent to USD 11.18 billion): China (+8.7 percent to USD 222.566); the EU (+14.1 percent to USD 95.15 billion); Mexico (+6.5 percent to USD 43.58 bilion); Japan (+1 percent to USD 40.09 billion) and OPEC (+49.7 percent to USD 14.36 billion). 

US Trade Gap Rises The Most in 3 Years