US trade deficit with China shrinks on dip in imports

A Maersk container ship is guided by a tug boat in New York Harbour in New York City, June 27, 2018. — Reuters pic
A Maersk container ship is guided by a tug boat in New York Harbour in New York City, June 27, 2018. — Reuters pic

WASHINGTON, May 9 — The US trade deficit widened in March, reversing the dip in February, but amid a high-stakes trade war the gap with narrowed, according to government data released today.

Goods imports from China fell to their lowest level in almost three years, with a notable drop in purchases of mobile phones and other household goods, according the Commerce Department report.

The modest increase in the US trade gap came as President Donald Trump’s efforts to conclude a year-long trade battle with China verged on collapse, with punitive duty rates on hundreds of billions of goods due to more than double in less than 24 hours.

American officials say Chinese negotiators have reneged on core promises made during months of talks but they are due to resume later today.

Trump has made trade a defining issue of his presidency, believing trade imbalances destroy jobs and drain the world’s largest economy, but the trade deficit has continued to rise since he took office.

The deficit in merchandise trade with China fell 6.2 per cent to US$28.3 billion (RM117.5 billion), seasonally adjusted, the lowest level since April 2016.

In March, the total US trade gap — the difference between what the United States sells abroad and what it buys — rose 1.5 per cent from February to US$50 billion, a slightly smaller increase than economists had been expecting, as American firms exported fewer jet planes but imported more crude oil and food.

That increase nevertheless put the deficit in the first quarter 3.7 per cent below the same three-month period of 2018.

Total US exports rose one per cent to US$212 billion, with higher sales of natural gas, fuel oil, coal used in forging metal and soy beans.

But sales of aircraft decreased by US$700 million, probably reflecting the suspension of deliveries by US aviation giant Boeing following the grounding worldwide of the top-selling 737 MAX aircraft in March in the wake of fatal crashes in Ethiopia and Indonesia.

Exports of services, like product licensing, tourism, and transportation, were the highest on record at US$70.3 billion.

Total imports meanwhile rose 1.1 per cent to US$262 billion, driven by faster purchases of crude oil and organic chemicals as well as seafood, wine, feeds, grains and other foods.

In non-seasonally adjusted numbers, the US goods deficit with Mexico hit a record US$9.5 billion for the month.

Exports to the EU were the highest on record at US$30.6 billion, while imports from Germany were likewise the highest on record at US$11.4 billion.

Imports from Japan reached their highest level in seven years at US$13.3 billion. — AFP

Source: The Malay Mail Online

Leave a Reply

Your email address will not be published. Required fields are marked as *

Time limit is exhausted. Please reload CAPTCHA.