Business

U.S. trade deficit rises on record imports from China

U.S. trade deficit rises on record imports from China

Imports rose 1.6 per cent over September to US$244.6 billion, seasonally-adjusted, the highest since the Commerce Department began publishing the statistic in 1992. The U.S. crude oil imports rose to $10.664 billion in October from $9.131 billion in September.

Apart from the $1.5-billion increase in crude oil imports, the higher US import bill was due to the highest on record imports of food, feeds, and beverages, and the highest on record non-petroleum imports.

Record imports from China helped drive up the US trade deficit 8.6 percent in October as retailers stocked up for the holidays, Commerce Department reported Tuesday. A rising trade gap reduces USA economic growth.

The Trump administration has focused its trade policy efforts on lowering the trade deficit, arguing that the United States has been shafted in trade deals such as the North American Free Trade Agreement.

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. The overall trade deficit widened 11.9% so far this year compared with the same period in 2016.

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Trump took office on a nationalist economic agenda, pledging to bring down the trade deficit by canceling or renegotiating trade pacts and aggressively policing the export practices of major trading partners.

The trade deficit increased to the highest since January and was above expectations of a Reuters poll of economists who had predicted the October deficit would stand at $47.5 billion.

The goods deficit with China increased from $34.6 billion in September to $35.2 billion in October.

"The widening in the trade deficit in October was driven by a suspiciously large fall in food exports which is likely to be reversed next month.Even accounting for some rebound in the final two months of the quarter, it seems likely that imports will outpace exports in the fourth quarter, meaning net trade will be a small drag on economic growth", said Michael Pearce, an economist at Capital Economics, in a note to clients.

Crude oil imports were up $1.5 billion in October.