United States trade deficit widens in August

Andrew Cummings
October 7, 2019

With the value of imports rising by more than the value of exports, the Commerce Department released a report on Friday showing the US trade deficit widened by more than anticipated in the month of August.

The trade war with China, and the uncertainty that surrounds it, have disrupted companies' supply chains, increased input costs and delayed investments in hiring and investment. So far in 2019, the United States goods deficit with Mexico has surged 30.6 percent but with China it has declined 11.7 percent with China.

While the Trump administration has tried to shrink the trade gap by imposing additional tariffs on various imports, the US trade deficit widened to 428.7 billion dollars in the first eight months of this year, up 28.3 billion dollars, or 7.1 percent, from the same period in 2018.

The Commerce Department said on Friday the trade deficit rose 1.6% to $54.9 billion. Imports increased 0.5% to $262.8 billion on a big increase in shipments of cellphones, which are scheduled to be hit with new tariffs in December as part of the standoff with China. The July trade gap was unrevised at $54.0 billion.

Since the end of August, the trade war has continued to escalate as additional duties went into effect on September 1. Chinese officials are set to visit Washington for trade talks next week.

Overall exports increased 0.2% to $207.9 billion, including industrial supplies and foods. The goods trade deficit with the European Union jumped 23.7% to $15.3 billion. But it ran a $19.5 billion surplus in the trade of services such as banking and education.

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