Business & Trade

U.S. trade deficit surges to five-month high as imports soar

U.S. trade deficit surges to five-month high as imports soar

The deficit in the international trade of goods and services of the United States rose by 8.4{dd299c883823a46beb0705d70a03c819bede140f906792bc593d52b8d4c5e8ee} in May to 55,500 million dollars, the highest figure in five months and with a significant increase in imports from Mexico despite the protectionist efforts of President Donald Trump.

In May, exports reached a value of 210,600 million dollars, 2{dd299c883823a46beb0705d70a03c819bede140f906792bc593d52b8d4c5e8ee} more than in the previous month; and imports rose 3.3{dd299c883823a46beb0705d70a03c819bede140f906792bc593d52b8d4c5e8ee} to 266.2 billion dollars, the Department of Commerce reported Wednesday.

In the first five months of the year, the trade deficit increased by 6.4{dd299c883823a46beb0705d70a03c819bede140f906792bc593d52b8d4c5e8ee} compared to the same period of 2018, to a total of 261,400 million dollars.
The increase in May was largely due to the abrupt increase in automobile imports of 7.5{dd299c883823a46beb0705d70a03c819bede140f906792bc593d52b8d4c5e8ee}, as well as the 11{dd299c883823a46beb0705d70a03c819bede140f906792bc593d52b8d4c5e8ee} increase in crude imports.

The deficit with China, very sensitive politically for the commercial war unleashed by the US president, rose by 12{dd299c883823a46beb0705d70a03c819bede140f906792bc593d52b8d4c5e8ee} in May, to 30.2 billion dollars.
Last weekend Trump met in the framework of the G20 summit in Japan with Chinese President Xi Jinping and reached a new truce in the trade dispute, which has encouraged the financial markets.

Trump agreed not to impose new tariffs on Chinese imports. The president came to the White House with the promise to reduce the huge trade deficit in the country, but after more than two years in office has not managed to reduce the imbalance.

In fact, economists consider that the trade balance is not a significant indicator of the economic health of a country. The United States, as the world’s leading economy, often sees deficits rising historically during boom times by increasing Americans’ appetite for imports.

Indeed, the United States is experiencing a period of solid economic expansion, with an annual growth rate of 3.1{dd299c883823a46beb0705d70a03c819bede140f906792bc593d52b8d4c5e8ee} in the first quarter of 2019, spurred by the aggressive fiscal stimulus launched by Trump through tax cuts for companies and, to a lesser extent, the workers. These tensions have caused concern in the financial markets and doubts about the evolution of the global economy.

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Charles Barker
Charles Barker is the team’s trusted source for all news relating to equity markets and is treated as a business expert. They cover stories which matter in the international trading and business arena, including large transactions, or moves by nations in any direction, affecting the business markets.

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