Sun, Nov 04, 2018 - Page 16 News List

US trade deficit balloons as imports break record

AFP, WASHINGTON

The US flag flies over shipping containers at the Port of Long Beach, Los Angeles County, on Sept. 29.

Photo: AFP

A hungry US economy powered by a strong US dollar saw record imports in September, driving the US trade deficit to its highest level in seven months, the US government reported on Friday.

Amid US President Donald Trump’s trade war with Beijing, the US trade deficit with China swelled again as crucial soybean exports — a sore spot for Republicans in next week’s midterm elections — continued to suffer.

With rising wages and low unemployment, Americans purchased more foreign-made telecommunications equipment, computers, mobile phones, aircraft engines, clothing and toys, the US Department of Commerce said.

The US trade deficit posted its fourth straight monthly increase, rising 1.3 percent to a seasonally adjusted US$54 billion, significantly overshooting analysts’ forecasts, as imports hit US$266.6 billion, the highest level ever recorded. Exports also rose to US$212.6 billion

The US trade gap has increased a steep 10.1 percent so far this year.

The expanding trade gap should weigh on GDP calculations in the third quarter, although many estimates might already have factored in the trade drag.

Trade with China, a central target of Trump’s aggressive economic agenda, was a clear culprit, as the deficit in goods with the world’s second-largest economy jumped US$3 billion to US$37.4 billion, seasonally adjusted.

Goods imports from China hit a record of US$47.7 billion, seasonally adjusted, an increase of US$3.5 billion from August.

The trade report showed that US producers sold more gold, petroleum products and civilian aircraft, but exports of soybeans fell US$700 billion from August, also largely the result of the trade spat with China.

US imports rose faster than exports on robust spending by companies and consumers — driving the US goods deficit to its highest level ever recorded at US$76.3 billion.

US goods imports also were the highest ever, at US$217.6 billion.

Markets, manufacturers and importers are bracing for a stiff increase in US duties on Chinese goods, which are due to rise to 25 percent on Jan. 1.

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