WASHINGTON: A bump in US exports helped shrink America’s yawning trade deficit in July while imports from China continued to fall amid the two nations’ trade war, government data showed Wednesday.
The relatively steady deficit comes as hopes for a near-term resolution to the US-China conflict slide out of view.
The US trade gap narrowed by 2.7 percent to $54 billion, the largest drop in five months, as the United States exported more autos, medications, aircraft and oil drilling equipment, the Commerce Department said.
The July dip could support GDP growth at the start of the third quarter. However, economists had been expecting an even bigger decline.
Imports from China, the prime target of President Donald Trump’s multi-pronged trade offensive launched last year, fell 1.9 percent to $39 billion, their lowest level since April.
Mexico and the European Union appear to have picked up some of the slack, as the US deficit with both markets continues to rise.
Trump this week has fired off stern warnings to Beijing and has planned successive waves of tariff increases through the end of the year covering the vast majority of all US imports. Negotiations have yet to resume.
The deficit — which is the difference between what the United States exports and imports — has widened so far this year by more than 8 percent.
But President Donald Trump has long viewed deficits as a defeat for the United States, claiming that they amount to stealing, assertions generally rejected by most economists.
And, despite his efforts to cut the deficit, it has continued to rise during his presidency as a growing economy, hungry for goods and services, steadily increased imports.
Weak commodities prices hit US exports for the month, as the value of crude oil, coal, fuel oil and other petroleum products fell.
Meanwhile, US services imports, such as tourism and software royalties, hit a record $49.6 billion, eating into an area where America normally enjoys a healthy surplus.