US trade deficit narrows slightly to $ 70.1 billion in July
The US trade deficit narrowed slightly to $ 70.1 billion in July, as the economic recovery abroad helped boost US exports while imports declined.
The Commerce Department said Thursday that the trade deficit fell 4.3% in July after hitting a record $ 73.2 billion in June. The trade deficit represents the difference between what the country exports to the rest of the world and the imports it buys from other countries.
In July, exports jumped 1.3% to $ 212.6 billion, reflecting the recovery in foreign demand, while imports edged down 0.2% to $ 282.9 billion.
The politically sensitive goods deficit with China increased 2.9% in July from June to $ 28.6 billion and totals $ 187.2 billion in the first seven months of this year, up by 15% compared to the same period a year ago.
As usual, the trade deficit with China was the biggest US deficit with any country. Donald Trump targeted what he saw as unfair trade practices from China during his presidency, sparking a trade war between the world’s two largest economies, with China retaliating against punitive US tariffs by raising its own tariffs on US goods , especially on soybeans.
President Joe Biden has so far not indicated how he plans to deal with the economic tensions between the two nations.
So far this year, the US trade deficit stands at $ 141.7 billion, down 6% from the total for the same period last year. The deficit for all of 2020 was $ 676.7 billion, 17.4% higher than in 2019.
Economists believe deficits for the rest of the year are expected to moderate as rising consumer demand after the country reopens slows down, reducing demand for foreign goods, while US exports are expected to continue to grow as the country reopens. the recovery of overseas economies. However, analysts warn that much will depend on how COVID cases evolve in the coming months in the United States and abroad.
“The pandemic will continue to pose a downside risk to trade flows, but we expect a gradual normalization of trade dynamics as vaccinations increase and supply disruptions slowly abate,” said Mahir Rasheed, American economist at Oxford Economics.
The goods deficit totaled $ 87.7 billion in July, down from the goods deficit of $ 93.3 billion in June. The US surplus in services, which has suffered this year from weak air transport, fell to $ 17.7 billion in July, from a surplus of $ 20 billion in June.
However, much of the decline in July reflected an increase in imports of services reflecting payments made by NBC to cover the Summer Olympics in Tokyo.
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