News Worms
News Worms

Higher Oil Prices Widen US Trade Deficit

Higher Oil Prices Widen US Trade Deficit

Good coming into the US from China, Mexico and the European Union all hit record levels, which boosted the trade gap to $48.7 billion - from $44.9 billion in September- and is the highest since President Trump took office in January.

Record imports from China helped drive up the USA trade deficit 8.6 percent in October as retailers stocked up for the holidays, Commerce Department reported Tuesday.

Goods and services from China totaled $48.2 billion, while European Union imports amounted to $39.4 billion and Mexico's exports grew to $28.7 billion, which are all record highs.

The foreign-trade gap in goods and services expanded 8.6% from the prior month to a seasonally adjusted $48.73 billion in October, the Commerce Department said Tuesday.

The bigger than expected increase in the size of the deficit was primarily due to a jump in the value of imports, which surged up by 1.6% to USD244.6 billion.

Exports to China, meanwhile, were the highest in nearly four years, at US$13 billion.

TD Bank economist Dina Ignjatovic noted that the recovery in export volumes in October fully erased declines in August and September and provides a stronger hand-off for the fourth quarter.

Several powerful late-summer hurricanes may have affected trade data for recent months, though the Commerce Department said the "effects generally can not be isolated".

He added, "Together with the depreciation of the dollar this year, we think export growth should rebound over the coming months, suggesting that net trade should be broadly neutral for economic growth next year".

Imports of mobile phones rose US$300 million as did transportation services.

The White House is attempting to renegotiate the North American Free Trade Agreement, but has said it could walk away from the pact with Mexico and Canada if it can't broker what the administration sees as a better deal. The U.S. crude oil imports rose to $10.664 billion in October from $9.131 billion in September. Economists attribute the chronic trade deficit the USA has faced for decades to Americans consuming more than they produce relative to the rest of the world's economies.


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