The United States trade deficit continued to widen in August to its highest point in 14 years, as imports outpaced exports amid the ongoing coronavirus pandemic, according to official data released on Tuesday, October 6.
The deficit rose 5.9% from July to $67.1 billion, increasing more than expected but posting a more moderate jump than the nearly 19% surge in the month prior, according to the Commerce Department report.
However, the August trade gap was the largest since August 2006, and the deficit in goods alone was the highest on record at $83.9 billion.
US Trade Representative Robert Lighthizer cheered the data, saying it showed the United States – home to the world’s worst coronavirus outbreak with more than 210,000 people dead – performed better than other countries amid the downturn.
“As other countries recover and reopen, we expect both imports and exports to improve substantially,” he said in a statement.
US exports increased $3.6 billion to $171.9 billion in August, not enough to offset the $7.4-billion climb in imports to $239 billion.
The growth in the deficit came from a slight decrease in the services surplus to $16.8 billion, as travel and tourism are largely shut down, while the goods deficit climbed $3 billion.
The Commerce Department warned, “Exports and imports in August reflect both the ongoing impact of the COVID-19 pandemic and the continued recovery from the sharp declines earlier this year.”
Those disruptions were brought on by business shutdowns and border closures to stop the spread of the virus, measures that have eased somewhat in the US and elsewhere as firms adapt to new health protocols.
“Exports and imports are continuing to recover from low levels, though imports have made a stronger rebound,” Rubeela Farooqi of High Frequency Economics said. “Overall, trade flows remain subdued and the outlook is uncertain given a muted global growth and demand backdrop.”
Exports remain 17.6% below the same period in 2019, and imports are down 13.1%, the report said.
Industrial supplies and materials were among the most exported products, according to the data, increasing $3.9 billion.
Services exports saw only scant gains led by other business services, while travel decreased.
Consumer goods made up more than half of the increase in imports, with pharmaceutical preparations increasing $2.7 billion.
The data showed the US deficit with Germany and Japan increasing by $1.6 billion and $1 billion, respectively.
However, the deficit with China, which signed a partial truce with Washington in January to end months of trade conflict, decreased by $1.9 billion, as exports climbed $1.7 billion and imports fell slightly. – Rappler.com