ZCZC
BCN-28
US-TRADE-DEFICIT
U.S. trade deficit widens to six-month high in August
WASHINGTON, Oct. 6, 2018 (BSS/Xinhua) – U.S. trade deficit widened to a
six-month high in August as imports hit a record high and exports dropped
further, suggesting trade frictions could drag economic growth in the third
quarter of the year.
The goods and services deficit climbed to 53.2 billion U.S. dollars in
August from a revised 50 billion dollars in July, registering the biggest
trade gap since February, the Commerce Department reported on Friday.
U.S. imports rose 0.6 percent to an all-time high of 262.7 billion dollars
in August, while exports fell 0.8 percent to 209.4 billion dollars, according
to the department.
In August, soybean exports fell 28 percent to 2.58 billion dollars due to
retaliatory tariffs from other trading partners on U.S. agricultural
products.
Under the “America First” protectionist policies, the Trump administration
has imposed high tariffs on a variety of imported products worth hundreds of
billions of dollars, provoking strong opposition from domestic business
communities and retaliatory measures from U.S. trading partners.
“I think if this, perhaps inadvertently, goes to a place where we have
widespread tariffs that remain in place for a long time, a more protectionist
world, that’s going to be bad for the United States’ economy, and for
American workers and families,” Federal Reserve Chairman Jerome Powell said
at a press conference last month.
While the Trump administration has vowed to shrink the trade gap by
renegotiating trade agreements and imposing tariffs on imports, the trade
deficit rose to 391 billion dollars in the first eight months this year, up
8.6 percent from the same period in 2017.
Raising tariffs against imports is not the right way to reduce the U.S.
trade deficit, which is likely to increase further because of the planned
U.S. fiscal stimulus, according to Maurice Obstfeld, chief economist with the
International Monetary Fund (IMF).
“Trade policies don’t have major quantitatively measurable impact on
current account imbalances, which are mainly a macroeconomic phenomenon,”
Obstfeld said.
Based on current fiscal measures, the IMF estimated that the U.S. current
account deficit, which is mainly made up of the trade deficit, would rise to
3.6 percent of gross domestic product (GDP) by 2020 from 2.4 percent in 2017.
Economists believed that the widening trade deficit is likely to become a
drag on the economic growth in the third quarter of the year.
The U.S. economy is expected to grow at an annual rate of 2.3 percent in
the third quarter, down from 4.2 percent in the second quarter, according to
the latest forecast released by the Federal Reserve Bank of New York on
Friday.
BSS/XINHUA/HR/1455