Arthur J. Villasanta – Fourth Estate Contributor
Washington, DC, United States (4E) – The first month of the trade war didn’t yield the results Donald Trump wanted as trade deficits with the European Union and China soared to record highs.
July saw the United States register its largest total trade deficit in three years, defeating Trump’s aim of lowering this deficit with the world. America’s total trade deficit (goods and services) with the world jumped 9.5 percent to $50.1 billion compared to $45.7 billion in June.
This was the biggest deficit since February, said the U.S. Department of Commerce. Adding to U.S. woes is a drop in exports by one percent in July. The Commerce Department said this decline was caused by steep drops in exports of aircraft and soybeans, most of which went to China before the start of Trump’s trade war in July.
Total U.S. merchandise exports fell to $211.1 billion in July. Much of this decline was accounted for by a $1.57 billion drop in shipments of civilian aircraft and a $682 million plunge in soybean exports. Imports increased to $261.2 billion, or by one percent, due to increased shipments of computers, oil and motor vehicles.
U.S. agriculture is feeling the brunt of Trump’s trade war. Soybean exports plummeted 16 percent in July to settle at $3.53 billion. July corn exports fell by 11 percent to $1.28 billion
The trade picture with China remains worrisome for the United States. The U.S. trade deficit with China rose to a record new high despite the punishing tariffs imposed by the U.S. on a wide range of Chinese exports in July.
The Trump administration levied higher duties on $34 billion of Chinese goods on July 6, triggering immediate retaliation from China. The U.S. then imposed another $16 billion in taxes on Aug. 23. A further $200 billion in new tariffs will be imposed before the end of the year.
The merchandise trade gap with China ballooned to a record $36.8 billion compared to $33.5 billion in June, according to the Commerce Department. The deficit with the EU soared to a $17.6 billion, a new record, from $11.7 billion. On the other hand, the trade gap with Mexico fell to $5.5 billion from $7.4 billion.
Economists said the widening U.S. trade deficit will impair the growth of the U.S. economy in the third quarter. The spike in the deficit in July was surprising given the second quarter saw a narrowing of the trade gap. The quarter also saw the pace of expansion expand at its fastest since 2014.
Trump’s tariffs are beginning to show their negative impacts on America’s economy. The unwarranted U.S. tariffs and retaliatory tariffs will eventually disrupt the flows of goods and services, said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC.
Article – All Rights Reserved.
Provided by FeedSyndicate