U.S. trade in goods posted a record deficit in August as U.S. consumer spending rebounded and imports of goods rose more than exports, according to the latest data. At the same time, while China dramatically increased its purchases of U.S. corn and soybeans in August, it fell far short of the purchase targets it committed to in the agreement.
Last month, the U.S. trade deficit in goods rose 3.5 percent to a record $82.9 billion, according to data released Tuesday (Sept. 29) by the U.S. Commerce Department. Exports of goods rose by 2.8 percent to $118.3 billion, but imports of goods rose even more, by 3.1 percent to $130.3 billion.
Last month’s import growth was led by consumer goods, which increased by 7 percent. Imports of food, capital, and consumer goods also showed strong growth. However, imports of industrial goods declined by 4.6 percent.
Analysts believe the goods trade deficit reflects a weak rebound in U.S. exports of goods, putting pressure on the overall economy, which could slow the U.S. recovery from the coronavirus pandemic.
In the second quarter of the year, the economy received a modest boost from the reopening of businesses and government bailout programs. Now, however, new cases of coronavirus are on the rise, and government funding and unemployment benefits for businesses are running out, causing economic activity to slow as we enter the fourth quarter.
At the same time, data show that although China increased its purchases of U.S. corn, soybeans, and automobiles in August, it is still far from meeting its procurement targets under the trade agreement.
The statistics show that as of the end of August, China was buying less than one-third of the total U.S. exports it had pledged to buy this year.
Compared to June of this year, China’s purchases of U.S. corn were up 513 percent, soybeans were up 432 percent, and automobiles were up 97 percent. However, China’s purchases of U.S. energy products in August were down 24 percent from the previous month, reaching about 14 percent of its annual target.
Under the first phase of the U.S.-China trade agreement signed on Jan. 15, Beijing will buy $200 billion more U.S. goods and services over the next two years than it did in 2017, the year before the trade war began. 2017 saw China import a total of $185 billion in U.S. goods and services.
In exchange, Washington agreed to reduce tariffs on $120 billion of Chinese products from 15 percent to 7.5 percent.
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