JAKARTA (TheInsiderStories) – The United States (US) trade deficit narrowed to US$43.1 billion in November 2019 from a downwardly revised $46.9 billion gap in the previous month. It compares with market expectations of a $43.8 billion shortfall. The trade gap shrank for the third straight month to the lowest since October 2016, the commerce department said Tuesday (01/07).
Imports slumped 1 percent to the lowest value in 2 years due to falling purchases of aircraft, computers and cell phones. Exports increased 0.7 percent to $209 billion, boosted by sales of drilling and oilfield equipment, jewelry, autos, diamonds, and aircraft engines, the data showed.
Through the first 11 months of 2019, the trade deficit is 0.7 percent smaller than in the same period in 2018. If that trend holds in December, the country will finish 2019 with a deficit slightly below last year’s $627.7 billion imbalance, which had been a 14.1 percent jump over 2017. That would mark the first year-to-year improvement since the deficit narrowed in 2013.
The politically sensitive deficit with China declined by 15.7 percent to $26.4 billion, with imports dropping 9.2 percent and exports jumping 13.7 percent. Through the first 11 months of 2019, the US trade deficit with China, the largest with any country, is 16.2 percent lower than the same period in 2018.
Year-to-date, the total deficit decreased by $3.9 billion. Trade flows between the world’s two biggest economies have been disrupted this year by the tit-for-tat trade war as both nations have imposed tariffs on the other nation’s products.
President Donald Trump withdrew a new round of tariffs covering popular consumer items such as cellphones that had been scheduled to go into effect in December after progress was made in reaching a so-called phase one trade agreement. That deal is scheduled to be signed on Jan. 15 in Washington, but the global economy is braced for more trade turbulence if the phase two talks covering more contentious US demands do not go well.
While Trump sees the US trade deficit as a sign of economic weakness that can be overcome with tougher trade deals, mainstream economists said the deficit reflects an economic reality that doesn’t yield much to changes in government policy: Americans consume more than they produce, and imports fill the gap.
Imports and exports of petroleum both fell in November but imports declined by a larger amount, pushing up the size of the US surplus in petroleum to $832 million, the third straight month the country has run a petroleum surplus and the largest amount on record going back to 1978. In November, the country ran a $63.9 billion deficit in the trade of goods such as autos, food, and appliances. But it ran a $20.8 billion surplus in services, including education and banking.
The deficit with Japan rose to $5.4 billion in November while the deficit with the countries of the European Union declined to $13.1 billion. America’s deficit with Mexico rose to $8.3 billion while the deficit with Canada totaled $1.4 billion, a drop from $3.3 billion in October, the data showed.
Written by Lexy Nantu, Email: firstname.lastname@example.org