Trade Deficit Widens Despite Tariffs: Record Deficits With China, Mexico
Mike (Mish) Shedlock | Oct 07, 2018 04:05AM ET
Today's trade report will set off hows from trump. Imports up, exports down. Record deficits with China and Mexico.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $53.2 billion in August, up $3.2 billion from $50.0 billion in July, revised.
Exports, Imports, and Balance
- August exports were $209.4 billion, $1.7 billion less than July exports.
- August imports were $262.7 billion, $1.5 billion more than July imports.
- The August increase in the goods and services deficit reflected an increase in the goods deficit of $3.6 billion to $76.7 billion and an increase in the services surplus of $0.4 billion to $23.5 billion.
- Year-to-date, the goods and services deficit increased $31.0 billion, or 8.6 percent, from the same period in 2017.
- Exports increased $129.6 billion or 8.4 percent. Imports increased $160.6 billion or 8.4 percent.
Exports
- Exports of goods decreased $1.9 billion to $138.9 billion in August.
- Industrial supplies and materials decreased $2.4 billion.
- Soybeans decreased $1.0 billion.
- Consumer goods increased $1.6 billion
- Exports of services increased $0.2 billion to $70.5 billion in August.
Imports
- Imports of goods increased $1.7 billion to $215.6 billion in August.
- Automotive vehicles, parts, and engines increased $1.0 billion.
- Cell phones and other household goods increased $0.9 billion.
Balance of Trade by Nation
China Canada Mexico Two-Quarter Total
- China: -178.785 Billion
- Mexico: -35.779 Billion
- Canada: +3.290 Billion
Through two quarters, the balance of trade with China and mexico are on a record negative pace. The US has a small surplus with Canada.
Headwinds for Trump
- The rising US dollar makes goods exports from the US more expensive and imports cheaper.
- Tariffs and rate hikes by the Fed both act to strengthen the dollar.
- The global economy is weaker than the US economy. This serves to boost imports and reduce exports.
Get The News You Want
Trump is fighting a counterproductive battle that he does not even understand.
China retaliatory tariffs on US soybeans target the US farm belt in a battle highly likely to hurt Republicans in the mid-term elections.
Trump's ballyhooed deal with Mexico and Canada was nothing more than hot air that accomplished nothing.
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