US trade deficit drops to $ 68.9 billion with rising exports, Auto News, ET Auto
New Delhi: The US trade deficit narrowed in April to $ 68.9 billion as improving global economy boosted sales of US exports.
April’s deficit, the gap between what America buys overseas and what it sells to other countries, was down 8.2 percent from a record $ 75 billion deficit. dollars in March, the Commerce Department reported on Tuesday.
Improving economic conditions abroad pushed up demand for US products while domestic demand for imports slowed.
In April, US goods and services exports rose 1.1% to $ 205 billion while imports fell 1.4% to $ 273.9 billion. Part of the increase in exports came from a $ 1.4 billion increase in civil aircraft sales, a positive sign that a rebound in air travel from depressed pandemic levels is leading to an increase in air travel. sales of airliners.
The decline in imports reflected a $ 1.1 billion decline in purchases of foreign-made automobiles and auto parts.
In the first four months of the year, the U.S. trade deficit stands at $ 281.7 billion, up 50.4% from the deficit for the same period in 2020, a period when the economy America was essentially closed due to the coronavirus pandemic.
The politically sensitive deficit with China fell to $ 25.8 billion in April, down 6.7% from the March imbalance. But in the first four months of this year, the deficit with China, the largest in the United States with any country, increased 37.1% from the same period a year ago.
The goods deficit alone in April stood at $ 86.7 billion while the services surplus stood at $ 17.8 billion. The United States has surpluses in trade in services that help reduce the goods deficit. However, the service economy, which includes travel payments such as airline tickets, has been hit hard by the coronavirus with a service surplus down 16.2% so far this year from the same period a year ago.
While many economists predict that the trade deficit will continue to decline over the next few months, some analysts fear that the recovery in the US economy will continue to favor products manufactured abroad.
“Domestic demand is roaring amid a reopening and rapid improvement in the health environment,” said Mahir Rasheed, US economist at Oxford Economics. “The trade deficit is set to widen further as the recovery fueled by taxation and consumption in the United States precedes the global economic rebound.”
But Michael Pearce, a senior US economist, said he believes trade will give overall economic growth a slight boost in the current quarter from April to June, helped by improved performance of US exports. This would represent an improvement over the big drag on economic growth caused by trade in the first quarter.
During his four years in office, Donald Trump pursued a strict trade strategy that used punitive tariffs on exports from other countries in an effort to reduce America’s huge trade deficits with the rest of the world, which ‘He blamed the loss of millions of Americans in manufacturing jobs.
But Trump’s efforts have failed to change trade imbalances. So far, the Biden administration has left most of the penalty tariffs in place as its administration struggles to determine which approach it will take to trade.