Record imports balloon US trade deficit in September

The trade spat between Washington and Beijing has negatively impacted 60% of US firms in China, a survey has found (AFP pic)

WASHINGTON: A hungry American economy powered by a strong US dollar saw record imports in September, driving the US trade deficit to its highest level in seven months, the government reported Friday.

And amid President Donald Trump’s trade war with Beijing, the US trade deficit with China swelled to highest level in history, as crucial soybean exports — a sore spot for Republicans in next week’s midterm elections — continued to suffer.

With rising wages and low unemployment, Americans purchased more foreign-made telecommunications equipment, computers, mobile phones, aircraft engines, clothing and toys, the Commerce Department said.

The US trade deficit rose 1.3% to a seasonally adjusted US$54 billion, significantly overshooting analyst forecasts, as imports hit US$266.6 billion, the highest level ever recorded. Exports also rose to US$212.6 billion

The US trade gap has increased a steep 10.1% so far this year.

Trade with China, a central target of Trump’s aggressive economic agenda, was a clear culprit, as the deficit in goods with the world’s second largest economy jumped US$3 billion to US$37.4 billion, not seasonally adjusted.

Goods imports from China hit a record of US$47.7 billion, seasonally adjusted, an increase of US$3.5 billion from August.

Trump spoke to Chinese President Xi Jinping to discuss the ongoing trade confrontation, and the two are expected to meet late this month at the Group of 20 summit in Argentina. That will be a chance for the two to work towards ending a deadlock, which has imposed steep tariffs on hundreds of millions of dollars in two-way trade.

However, markets, manufacturers and importers are bracing for a stiff increase in US duties on Chinese goods, which are due to rise to 25% on January 1

The trade report showed American producers sold more gold, petroleum products and civilian aircraft, but exports of soybeans fell US$700 billion from August.

But US imports rose faster than exports on robust spending by companies and consumers — driving the US goods deficit to its highest level ever recorded at US$76.3 billion.

US goods imports also were the highest ever, at US$217.6 billion.