US trade deficit takes biggest tumble in eight months

Washington: The US trade deficit fell by the most in eight months in September as imports of autos, mobile phones and other electronics retreated after the pre-tariff surge in August, according to government data 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 Commerce Department reported.

US trade gap

The US trade gap, the shortfall between what Americans buy from abroad and what they sell in foreign markets, fell 4.7 percent to $52.5 billion, which matched economists’ expectations but was the biggest tumble since January.

US President Donald Trump in September piled even more tariffs on China, jacking up duties on more than $100 billion in Chinese goods, likely prompting an 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 finalize a partial deal to end the trade war Trump began last year.

Exports fell 0.9 percent

US exports fell 0.9 percent in September to $206 billion as international sales of soy beans, passenger cars and trucks together fell $2.5 billion. 

This was slightly offset by higher exports of aircraft and aircraft engines.

Imports fell 1.7 percent to $258.4 billion, the report said. Ahead of the holiday shopping period, purchases of toys, games, artwork and collectibles fell, as did foreign purchases of trucks, buses, semiconductors, autos and 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, in the year to date, the trade gap is up 5.4 percent from the first nine months of 2018 to $481.3 billion.

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 percent so far this year to $266.4 billion but the gap with Mexico over the same period has skyrocketed by 29.4 percent, underscoring the rebalancing of trade relations under Trump’s trade offensive.

A strong US dollar likely also encouraged tourism, sending US imports of services to $49.9 billion, their highest level on record.

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