US trade deficit hit $67.1 billion in August

WASHINGTON — The US trade deficit rose in August to the highest level in 14 years.

The Commerce Department reported that the gap between the goods and services the United States sells and what it buys abroad climbed 5.9 per cent in August to $67.1 billion, highest since August 2006. Exports rose 2.2 per cent to $171.9 billion on a surge in shipments of soybeans, but imports rose more — up 3.2 per cent to $239 billion — led by purchases of crude oil, cars and auto parts.

The US deficit with the rest of the world in the trade of goods such as airplanes and appliances set a record $83.9 billion in August. The United States ran a surplus of $16.8 billion in the trade of services such as banking and education, lowest since January 2012.

The politically sensitive deficit in the trade of goods with China fell 6.7 per cent to $26.4 billion.

So far this year, the United States has recorded a trade gap of $421.8 billion, up 5.7 per cent from January-August 2019.

Hammered by the coronavirus and its fallout on the world economy, total US trade — exports plus imports — is down 15.1 per cent so far this year to $3.2 trillion.

“Overall, trade flows remain subdued and the outlook is uncertain given a muted global growth and demand backdrop,” said Rubeela Farooqi, chief US economist at High Frequency Economics.

President Donald Trump campaigned on a pledge to bring down America’s persistent trade deficits. He imposed taxes on imports of steel, aluminum and most products from China, among other things; and renegotiated a North American trade pact in an effort to encourage more production in the United States.

But the trade deficit won’t yield easily to changes in trade policy. As the US economy recovers from springtime shutdowns, Americans are buying more imported goods while foreign demand for US products remains weak.