Plunging US imports push trade deficit to 3-year low in November
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America's trade deficit continued to tumble in November, hitting its lowest level in three years as imports of crude oil, computers and industrial supplies fell off sharply, the government reported Tuesday.
That put the United States on track for the first drop in the annual trade deficit in six years.
Lowering the trade deficit has been a chief goal of President Donald Trump's aggressive trade policy.
The drop could help lift GDP growth for the final months of 2019, but falling imports are not necessarily a good sign, as they can point to weakening economic activity and demand.
The trade gap -- the difference between what the United States buys from and sells to international trading partners -- fell 8.2 percent in November to $43.1 billion, even lower than economists had expected and the lowest since October 2016, according to the Commerce Department data.
Imports fell 1.7 percent to $251.7 billion for the month, the lowest level in more than two years, as Americans purchased fewer mobile phones, artwork, civilian aircraft, and computers.
Crude oil imports, adjusted for inflation and seasonal changes, were the lowest since records began in 1994, reflecting increased domestic supply, as America transformed in recent years to become the world's largest producer.
Autos and parts bucked the trend, with imports rising $1.1 billion.
Meanwhile, exports rose 0.7 percent to $208.6 billion, as Americans shipped out more drilling and oilfield equipment, jewelry and gems, autos and aircraft engines.
- Falling imports not a good sign -
Over the first 11 months of 2019, the trade deficit decreased 0.7 percent compared to the same period in the prior year. The US trade deficit has not decreased on a full-year basis since 2013.
Economists say falling imports could partly reflect the steep tariffs Trump imposed earlier this year on Chinese imports, even though last month he cancelled plans for what threatened to be the most painful round of duty increases yet.
Trump announced the two sides are due to sign a partial agreement in Washington next week, halting the escalation in their trade conflict of nearly two years.
But many of the trade barriers remain.
In November, the goods trade deficit with China fell 7.8 percent compared to October's level, and it is down 16 percent since the start of the year.
With Mexico, however, the goods deficit continued to rise, growing 8.7 percent compared to October, marking a year-to-date increase of nearly 28 percent.
Trump likens the trade deficit to stealing from America, but economists do not share this view, saying the United States does not produce enough domestically to meet its own needs.
© 2020 AFP