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Trade Deficit Stable but Imbalances with Japan, Korea See Sharp Increase

Friday, May 05, 2017
Sandler, Travis & Rosenberg Trade Report

The U.S. monthly trade deficit in goods and services edged down 0.2 percent in March to $43.7 billion a month after a 9.5 percent decrease. Exports slipped 0.9 percent to $191.0 billion while imports lost 0.7 percent to $234.7 billion. Press sources note that so far this year the overall U.S. trade deficit is up by more than seven percent from 2016.

The Trump administration has made reducing the U.S. trade deficit a major focus. On March 31 Trump ordered a report identifying those foreign trading partners with which the U.S. had a significant goods trade deficit in 2016. A May 2 executive order mandated comprehensive performance reviews of all trade relations with countries governed by World Trade Organization rules with which the U.S. does not have free trade agreements but does run significant goods trade deficits. Trump also established a new Office of Trade and Manufacturing Policy that will advise him on policies to decrease the trade deficit, among other objectives.

The administration has raised particular concern with the deficit in goods trade, which grew 0.6 percent in March to $65.5 billion. Imports of goods were down 0.9 percent to $191.8 billion, including decreases of $600 million in crude oil, $400 million in other petroleum products, $300 million in civilian aircraft, and $200 million in computers, along with a $1.1 billion increase in passenger cars. Exports of goods fell 1.6 percent to $126.3 billion, including losses of $800 million in passenger cars, $600 million in fuel oil, $600 million in other petroleum products, $400 million in civilian aircraft engines, and $400 million in telecommunications equipment.

The services surplus rose 1.9 percent to $21.8 billion. Imports were down less than $0.1 billion to $42.9 billion but exports rose 0.6 percent to $64.7 billion.

Country/region

Deficit

% Change

Surplus

% Change

China

$31.4 billion

-0.9

   

European Union

$10.0 billion

-16.7

   

Mexico

$6.5 billion

+4.8

   

Japan

$6.5 billion

+32.7

   

Germany

$5.0 billion

-3.8

   

South Korea

$2.5 billion

+31.6

Italy

$2.1 billion

0

   

Canada

$1.9 billion

-20.8

   

India

$1.7 billion

-5.6

   

Taiwan

$1.1 billion

0

Saudi Arabia

$0.8 billion

-33.3

France

$0.1 billion

-92.3

   

Hong Kong

   

$2.9 billion

-12.1

South/Central America

   

$2.6 billion

+30.0

Singapore

   

$0.5 billion

-54.5

United Kingdom

$0.5 billion

+150

Brazil

   

$0.2 billion

-60.0

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