US trade deficit widens to $48.3 billion in August

WASHINGTON: The US trade deficit jumped sharply in August as exports fell to the lowest level in nearly three years while imports increased, led by a surge in shipments of cell phones from China.
The deficit increased 15.6 percent to $48.3 billion, the biggest deficit since March, the Commerce Department reported. Exports of goods and services dropped 2 percent to $185.1 billion, the lowest level since October 2012, while imports rose 1.2 percent to $233.4 billion.
Exports have been hurt this year by the rising value of the dollar, which makes US goods less competitive on overseas markets, and weaker economic growth in China and other major export markets. Economists say they expect these trends will combine to push the deficit higher and make trade a drag on overall growth this year.
So far this year, the deficit is running at an annual rate of $531.6 billion, 4.6 percent higher than last year’s deficit of $508.3 billion. The higher deficit reflects the fact that weaker global growth and the stronger dollar have reduced exports of US products and cut into the overseas profits of American companies.
Canada, America’s largest trading partner, is in a recession and China, the world’s second largest economy is growing much more slowly while many emerging market economies are being battered by a plunge in commodity prices.
The US has already reached agreement with Japan and nine other Pacific Rim nations on what would be the largest regional trade pact in history.
But the Obama administration will face a major challenge winning congressional approval for the Trans Pacific Partnership trade deal against opponents who argue that the agreement will expose American workers to more unfair foreign competition.