US trade gap widens in Oct

6 December, 2020 12:00 AM printer

WASHINGTON: Falling soybean exports and a jump in cell phone and auto imports helped expand the overall US trade deficit in October, although trade remains below the pre-pandemic level, according to government data Friday.

Total exports of goods and services rose by $4 billion but total imports increased $5 billion compared to September, taking the overall gap to $63.1 billion, the Commerce Department reported.

Though the total was less than expected, it is nearly double the level in February before Covid-19 nearly shut down global trade, reports AFP.

And with cases surging worldwide, economists warn the situation could deteriorate again.

"The outlook is uncertain. Virus transmissions remain elevated and widening restrictions on activity, at home and abroad, have the potential to disrupt supply chains and weigh on demand going forward," said Rubeela Farooqi of High Frequency Economics.

In the most high-profile trade relationship with China, the deficit in goods alone jumped $2.2 billion to $26.5 billion in October, according to the report.

President Donald Trump had made cutting the trade deficit, especially with China, a central goal of his presidency and unleashed a trade war that imposed steep tariffs on billions of dollars in imported goods, a strategy many economists say has hurt US firms and farmers.

Notable in the figures, US soybean exports -- a key feature of Trump's "phase one" trade deal with Beijing -- fell by $724 million, reversing the gains in the prior month.

Meanwhile, imports of cell phones and other household goods jumped $1.1 billion in the month, while imports of autos, parts and engines rose $1 billion, according to the report.

For the year to date, the trade gap is 9.5 percent larger than the same period of 2019, at $537 billion.