U.S. Trade Deficit Climbs to Six-Year High
Awash in a flood of foreign-made goods the U.S. saw its trade deficit in March balloon to $51.4 billion, the largest export-import imbalance since October 2008 and more than 43 percent higher than in February.
The recent disruption of cargo moving through U.S. West Coast ports and a strong dollar are being blamed for anemic U.S. goods exports, which grew just 0.9 per cent to $187.8 billion during the month. At the same time, according to Census Bureau figures released by the U.S. Commerce Department, imports of a wide variety of foreign-made products, particularly industrial machinery, food, autos, mobile phones, clothing and furniture, increased 7.7 percent to $239.2 billion.
The March increase in the goods and services deficit reflected an increase in the goods deficit of $14.9 billion to $70.6 billion and a decrease in the services surplus of $0.6 billion to $19.2 billion.
CHINA DEFICIT SOARS AS SURPLUS WITH OPEC GROWS
Not surprisingly, the trade deficit with China increased $10.5 billion to $37.8 billion in March. Exports increased $0.4 billion to $9.3 billion and imports increased $10.9 billion to $47.1 billion.
Deficits were also recorded with the European Union ($11 billion), Japan ($6.3 billion), Mexico ($4.8 billion), South Korea ($2.6 billion), India ($2.0 billion), Canada ($1.4 billion), and Saudi Arabia ($0.1 billion).
Surpluses in March were recorded with Central America ($2.9 billion) and Brazil ($0.4 billion), and OPEC ($0.7 billion) as imports of petroleum products were at a record low, reflecting lower oil prices and as the increase in energy production in the U.S. has significantly reduced the country’s dependence on foreign oil.
Economists are looking for growth to rebound in the current April-June quarter to around 2 percent, climbing to a 3 percent average in the second half of the year as the backlog of cargo at West Coast ports continues to shrink and stronger consumer spending would help offset sluggish export growth.