US trade balance

07.10.2020

The US foreign trade deficit widened to $67.1 billion in August. This is the highest monthly deficit in US foreign trade in services and goods for the last 14 years.

Exports volume in August increased by 2.2% compared with the August 2019 when it was $171.9 billion. While imports for the reporting period increased by 3.3% to $239 billion.

The U.S. trade deficit in goods itself was $83.9 billion, that is the highest rate ever.

For the January-August period, the US trade deficit grew by 5.7% compared with the eight months of 2019 and amounted to $421.8 billion.

President Donald trump has promised to reduce a foreign trade deficit of the United States. On his initiative, import duties were introduced or increased on steel, aluminum and for most commodities from China.

Thus, the US trade deficit in goods with China was decreased by 6.7% to $26.4 billion.

The US also renegotiated agreement on the North American Free Trade Area (NAFTA) and introduced a number of measures to stimulate domestic production.

However, despite all those taken measures, Americans continue to buy more imported goods, whereas the demand for American products abroad still remains low.

On September 16, the WTO Commission decided that US duties violate international trade regulations since they are applied only on China and exceed the maximum rates agreed with the US.

As part of the agreement signed in January, China shall increase procurement of goods and services in the United States by $200 billion compared to the level of 2017 within two years. This includes an increase in purchases of $76.7 billion in 2020 and $123.3 billion in 2021.

 


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