US trade deficit shrinks on rising exports

WASHINGTON • A bump in US exports helped shrink America's yawning trade deficit in July while imports from China continued to fall amid the two nations' trade war, government data showed yesterday.

The relatively steady deficit comes as hopes for a near-term resolution to the United States-China conflict slide out of view.

The US trade gap narrowed by 2.7 per cent to US$54 billion (S$75 billion), the largest drop in five months, as the US exported more vehicles, medication, aircraft and oil drilling equipment, said the Commerce Department.

The July dip could support gross domestic product growth at the start of the third quarter. However, economists had been expecting an even bigger deficit decline. Imports from China, the prime target of US President Donald Trump's multi-pronged trade offensive launched last year, fell 1.9 per cent to US$39 billion, their lowest level since April.

Mexico and the European Union appeared to have picked up some of the slack as the US deficit with both markets continued to rise.

The deficit, which is the difference between what the US exports and imports, has widened so far this year by more than 8 per cent.

Weak commodity prices hit US exports for the month. Meanwhile, US imports of services, such as tourism and software royalties, hit a record US$49.6 billion, eating into an area where the US normally enjoys a healthy surplus.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on September 05, 2019, with the headline 'US trade deficit shrinks on rising exports'. Print Edition | Subscribe