Ship-to-shore cranes work the container ship CMA CGM Laperouse at the Georgia Ports Authority’s Port of Savannah on Wednesday, September 29, 2021, in Savannah, Georgia. The US trade deficit hit a record $ 73.3 billion in August, a small gain as exports were overwhelmed by a much larger increase in imports. The Commerce Department announced on Tuesday, October 5, 2021 that the monthly trade deficit rose 4.2% in August, reaching a record high, surpassing the previous record of $ 73.2 billion set in June.
AP Photo / Stephen B. Morton
WASHINGTON (AP) – The US trade deficit hit a record $ 73.3 billion in August as a slight gain in exports was overwhelmed by a much larger increase in imports.
The Commerce Department reported on Tuesday that the monthly trade deficit rose 4.2% in August, reaching an all-time high, surpassing the previous record of $ 73.2 billion set in June. The trade deficit represents the difference between what the country exports to the rest of the world and the imports it buys from other countries.
In August, exports rose 0.5% to $ 213.7 billion, reflecting the recovery in overseas demand. But imports, even with all the supply chain issues at the ports, rose still more than 1.4% to $ 287 billion.
The politically sensitive goods deficit with China jumped 10.8% to $ 31.7 billion in August. This year’s eight-month deficit with China stands at $ 218.9 billion, up 13.7% from the same period a year ago.
The total deficit so far this year is $ 558.1 billion, 33.7% higher than last year when closures linked to the pandemic dampened Americans’ appetite for foreign goods.
Analysts said they expected the increase in the deficit to start easing now as other economies start to recover and buy more exports. However, some have warned that problems in the global supply chain could hurt both exports and imports in the coming months.
âThe shutdown of a significant portion of the global auto industry last month suggests that the sharp decline in auto exports and imports in August is yet to continue,â said Andrew Hunter, senior US economist at Capital Economics. The auto industry has been hit particularly hard by supply chain issues involving computer chips.
Katherine Tai, the Biden administration’s top trade negotiator, said on Monday that the United States plans to launch new trade talks with China, but will maintain Trump-era tariffs as it pushes China to respect the commitments it made to buy more American products and services.
The Biden administration has spent months since taking office examining economic relations with China, the world’s second-largest economy.