WASHINGTON: A dip in auto exports and rising oil prices in June drove the biggest increase in the US trade deficit in 19 months, reversing much of May’s export bonanza, the government reported Friday.
The result could weigh on revised calculations of second quarter growth, which President Donald Trump hailed as a key achievement of his economic policies last week after it was reported as the strongest GDP increase in nearly four years.
The US bilateral trade deficits also expanded with China, the European Union, Canada and Mexico — all of which have retaliated against Trump’s aggressive tariffs.
The US trade deficit rose 7.3 percent or $3.2 billion in June to $46.3 billion, overshooting analyst expectations. It was the largest jump in the trade gap since November 2016, according to the Commerce Department.
As the numbers were released, Beijing warned it was ready to impose new tariffs on $60 billion in American products if Trump pressed ahead with plans to hit another $200 billion in Chinese goods with steep punitive duties.
Trump has said trade wars are “easy to win” and made the soaring US-China goods deficit a principal issue in his nationalist economic agenda. But industry and allies in his Republican Party have expressed fear the dispute could spiral out of control.
While soybean exports continued to rise in July — as Chinese importers rushed to buy ahead of the retaliatory tariffs Beijing imposed in July — US shipments of automobiles, aircraft and pharmaceuticals fell.
Meanwhile, the deficit declined with Japan but that came amid an overall decline in trade between the world’s largest and third-largest economies.
Average prices for imported oil hit the highest level since December 2014 at $73.60 a barrel — bringing the value of oil imports for the month to $19.6 billion, also the highest in three and a half years.—AFP