U.S. trade gap widens in October on record imports

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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.

October imports were $244.6 billion, $3.8 billion more than September imports. The U.S. crude oil imports rose to $10.664 billion in October from $9.131 billion in September. In the first 10 months of 2017, the value of US imports rose 6.5% and exports increased 5.3% compared with the first 10 months of 2016.

The U.S. trade deficit with Canada increased from $300 million in September to $1.8 billion in October, with U.S. imports rising $1.4 billion-primarily crude oil-to $25.8 billion.

Year-to-date, the goods and services deficit increased $49.1 billion, or 11.9%, from the same period in 2016.

"I give China great credit, but in actuality I do blame past administrations for allowing this out-of-control trade deficit to take place", Trump said. Conventional economists argue that trade deficits are largely caused not by flawed trade agreements or cheating by particular countries but by a bigger economic force: Americans spend more than they produce, and imports have to fill in the gap.


Trump, who has been highly critical of the USA trade deficit with China, shifted responsibility for the gap to previous US administrations for failing to crack down on China amid widening trade gaps.

In October, the United States ran a surplus of $20.3 billion with the rest of the world in services such as banking and tourism.

"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.

A sharp increase in exports of industrial supplies and materials was more than offset by notable declines in exports of soybeans and civilian aircraft.

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