Still Lopsided And Getting Worse: US Trade Deficit With China Hits New All-Time High

If Trump wanted another reason to expand the tariffs with China, he just got it. Here’s more on the latest trade data with multiple records set…

from Zero Hedge

The August trade deficit – a closed watched number in a time of trade wars – came in at $53.2BN, fractionally better than the $53.6BN expected, but 6.4% worse than last month’s revised print of $50.0BN ($46.8BN excluding petroleum), and just shy of a new all time high.

The deficit deteriorated as a result of less exports (-0.8%) and more imports (+0.6%). Broken down, August exports were $209.4 billion, $1.7 billion less than July exports, while July imports were $262.7 billion, $1.6 billion more than July. August imports of goods (excluding services) of $215.6 billion were the highest on record

The August increase in the goods and services deficit reflected an increase in the goods deficit of $3.6 billion to $76.7 billion and an increase in the services surplus of $0.4 billion to $23.5 billion. Year-to-date, the goods and services deficit increased $31.0 billion, or 8.6 percent, from the same period in 2017. Exports increased $129.6 billion or 8.4 percent. Imports increased $160.6 billion or 8.4 percent.

  • August exports of services ($70.5 billion) were the highest on record.
  • August imports of goods and services ($262.7 billion) were the highest on record.
  • August imports of goods ($215.6 billion) were the highest on record.

Digging into the numbers, even more records were revealed:

  • August imports of industrial supplies and materials ($49.7 billion) were the highest since December 2014 ($51.8 billion).
  • August imports of automotive vehicles, parts, and engines ($31.7 billion) were the highest on record.
  • August imports of other goods ($9.1 billion) were the highest on record.
  • August petroleum imports ($20.5 billion) were the highest since December 2014 ($23.6 billion).

But what was most important is the geographic distribution of trade, and this is where Trump will be displeased because in July the trade deficit with both China ($36.8 billion)…

… and while the trade deficit with the EU rebounded from last month’s record high ($17.6 billion), to $15.7BN, the US also posted a record trade deficit with Mexico ($8.7BN) and Ireland ($4.3BN).

While this number will not have much of an impact on Q3 GDP, it could have a major impact on future trade because if Trump wanted one more “reason” to expand China’s tariffs to all Chinese imports, he just got it.