Pre-tariff surge in imports sees US trade deficit tumble
The US trade deficit fell the most in eight months in September — but US exports also fell as demand for American products wanes
Washington — The US trade deficit fell by the most in eight months in September as imports of vehicles, mobile phones and other electronics retreated after the pre-tariff surge in August, according to US government data on Tuesday.
Total exports also fell as the world’s appetite for key American products, including politically sensitive soy beans, continued to slacken and Boeing’s travails dragged on, the US commerce department reported.
The US trade gap, the shortfall between what Americans buy from abroad and what they sell in foreign markets, fell 4.7% to $52.5bn, which matched economists’ expectations but was the biggest fall since January.
In September, US President Donald Trump piled even more tariffs on China, jacking up duties on more than $100bn worth of Chinese goods, likely prompting a surge in buying in the previous month to lock-in lower prices — which widened the trade gap in August.
Recent media reports indicate US and Chinese officials are considering a roll-back of some tariffs as they work to finalise a partial deal to end the trade war that Trump began last year.
US exports fell 0.9% in September to $206bn as international sales of soy beans, passenger cars and trucks combined fell $2.5bn. This was slightly offset by higher exports of aircraft and aircraft engines.
Imports fell 1.7% to $258.4bn, the report said. Ahead of the holiday shopping period, purchases of toys, games, artwork and collectibles fell, as did foreign purchases of trucks, buses, semi-conductors, vehicles and automotive parts.
American oil producers also notched their first petroleum trade surplus since current records began more than 40 years ago.
The narrowing deficit should support GDP growth calculations for the July-September quarter. However, for the year to date, the trade gap is up 5.4% from the first nine months of 2018 to $481.3bn.
In a continuation of recent trends, in large part driven by Trump’s trade war with Beijing, US imports from China declined further as purchases from Mexico surged again.
The deficit with China has dived 13.1% so far in 2019 to $266.4bn but the gap with Mexico over the same period has skyrocketed by 29.4%, underscoring the rebalancing of trade relations under Trump’s trade offensive.
A strong dollar likely also encouraged tourism, sending US imports of services to $49.9bn, their highest level on record.