Trade Deficit Soars as Imports Rise, Exports Slip
Trade statistics released July 3 by the Department of Commerce show that the monthly U.S. trade deficit shot up 12.2% in May following an 8.6% gain in April. Monthly exports fell $0.5 billion to $187.1 billion while imports rose $4.4 billion to $232.1 billion. Press sources attribute the import gain to increased domestic demand, particularly for automobiles, auto parts, and foods and beverages, and the drop in exports to continuing economic struggles in foreign markets. Compared to a year earlier, the May trade deficit was down $1.2 billion as exports rose 1.5% and imports were up 0.7%.
The monthly deficit in goods trade increased 8.6% in May to $63.4 billion. Exports of goods fell $0.9 billion to $130.3 billion while imports rose $4.2 billion $193.7 billion. The services surplus edged up to $18.4 billion as exports rose $0.4 billion to $56.8 billion and imports saw a $0.2 billion gain to $38.4 billion.
The bilateral trade deficit with China rose sharply for the second straight month, climbing 15.8% to $27.9 billion. The U.S. also saw bigger deficits with Mexico (up 20.5% to $5.3 billion) and Korea (up 4.2% to $2.5 billion). However, deficits were down with the European Union (12.9% to $10.8 billion), Germany (4.9% to $5.8 billion), Japan (21.7% to $5.4 billion), India (4.2% to $2.3 billion), Ireland (4.2% to $2.3 billion) and Canada (17.4% to $1.9 billion).
The U.S. continued to run surpluses with several trade partners, including Hong Kong (up 25% to $3.0 billion), Australia (up 27.3% to $1.4 billion), Singapore (up 50% to $1.2 billion) and Brazil (down 25% to $0.9 billion).
While the monthly export figures were down, the Export-Import Bank pointed out that over the last 12 months U.S. exports of goods and services totaled $2.2 trillion, up 41.2% from 2009. The countries with the largest annualized increase in U.S. goods purchases over that period, when compared to 2009, were Panama (29.4%), the United Arab Emirates (24.1%), Russia (23.4%), Peru (22.2%), Chile (21.5%), Colombia (19.7%), Venezuela (19.4%), South Africa (19.1%), Hong Kong (18.9%) and Argentina (18.8%).
A Commerce Department press release added that automotive exports hit a record in May and that international travel and tourism are increasingly contributing to U.S. economic growth.