JAKARTA (TheInsiderStories) – United States (US) Commerce Department reported the country trade deficit narrowed to US$51.1 billion in January of 2019 from an upwardly revised $59.9 billion in the previous month, which was the largest since 2008.
Export rebounded, mainly due to soybeans and motor vehicles and parts and imports were the lowest since June 2018, according to the official data. The January decrease in the goods and services deficit reflected a fall in the goods deficit of $8.2 billion to $73.3 billion and an increase in the services surplus of $0.5 billion to $22.1 billion.
Total exports went up 0.9 percent month-over-month to $207.34 billion, following a 1.9 per cent drop in December. While, exports of goods increased $1.8 billion to $137.4 billion, mainly due to foods, feeds, and beverages ($1.3 billion); soybeans ($0.9 billion); automotive vehicles, parts, and engines ($1.2 billion); and passenger cars ($700 million).
On the other hand, sales went down for capital goods ($-800 million) and civilian aircraft ($-1.3 billion). Exports of services increased $200 million to $70.0 billion: other business services, which includes research and development services, professional and management services and technical, trade-related, and other services went up to $100 million and transport rose $100 million.
According to data, exports rose to Canada (1.3 per cent), Mexico (12.7 per cent), the European Union (7 per cent) and Brazil (5.3 per cent) but fell for China (-22.3 per cent to the lowest value since September of 2010), Japan (-5.6 per cent) and OPEC (-26.2 per cent).
Total imports dropped 2.6 per cent month-over-month to $258.49 billion, the lowest level since last June, following a 2.1 per cent rise in December.
Imports of goods decreased $6.5 billion to $210.7 billion, mainly due to purchases of capital goods ($-3 billion), computer accessories ($-900 million), semiconductors ($-700 million), civilian aircraft ($-700 million), industrial supplies and materials ($-2.3 billion), and crude oil ($-1.4 billion).
Imports of services went down $300 million to $47.8 billion, transport declined $200 million and travel (for all purposes including education) dropped $200 million. Other business services increased by $100 million.
Meanwhile, imports went down from China (-9.6 per cent), Canada (-1.5 per cent), the EU (-3.8 per cent), Japan (-6.7 per cent) and OPEC (-8.6 per cent) but rose from Mexico (2 per cent) and Brazil (4.3 per cent).
The goods deficit with China declined to $34.5 billion from $36.8 billion in December. The trade gap also narrowed with the EU ($-11.7 billion from $-15.1 billion), Mexico ($-5.8 billion from $-7.7 billion), Japan ($-5.2 billion from $-5.7 billion) and Canada ($-800 million from $-1.4 billion) but widened with OPEC ($-1.3 billion from $-300 million).
In 2018, the goods and services deficit increased 12.5 per cent to a 10 year high of $621 billion.
The US has been running consistent trade deficit since 1976 due to high imports of oil and consumer products. In 2018, the biggest trade deficits were recorded with China, Mexico, Germany, Japan, Ireland, Vietnam and Italy and the biggest trade surpluses with Hong Kong, Netherlands, Australia, United Arab Emirates, Belgium, Brazil and Panama.
China is the top trading partner, accounting for 16 per cent of total trade, followed by Canada (15 per cent) and Mexico (15 per cent).
The trade deficit remains elevated despite President Donald Trump’ “America First” policies, which have left the country mired in a bruising trade war with China and provoked retaliatory tariffs from other trading partners.
Washington last year imposed tariffs on $250 billion worth of goods imported from China, with Beijing hitting back with duties on $110 billion worth of American products, including soybeans and other commodities.
Trump has delayed tariffs on $200 billion worth of Chinese imports as negotiations to resolve the eight-month trade war continue, with Beijing pledging to resume bulk purchases of soybeans after cancellations at the height of the trade fight.
The US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are in China this week for another round of talks with Chinese Vice Premier Liu He.
Written by Lexy Nantu, Email: email@example.com