United States trade deficit rises to $48.7 billion on record imports

US trade gap widens in October on record imports

The Commerce Department said on Tuesday the trade gap widened 8.6 percent to $48.7 billion. As a result, the trade surplus with the United States, which accounted for 74.9 per cent of Canadian goods exports in October, expanded to $3.52 billion from $2.02 billion in September.

Other highlights in overall global trade of the USA last month include the highest imports on record from China, from Mexico, and from the European Union.

The so-called real trade deficit in October was above the third-quarter average of $62.0 billion.

The chronic trade deficit has garnered the attention of Republican President Donald Trump, who has blamed it for the massive loss of USA manufacturing jobs as well as moderate economic growth. The Trump administration believes a smaller trade deficit, together with deeper tax cuts could boost annual GDP growth to 3 percent on a sustained basis.

Imports of industrial supplies and materials increased $1.8 billion, reflecting a $1.5 billion increase in crude oil imports. Shipments from Mexico were also the highest ever, causing the USA gap with that country to expand in October.

Canada's hard-hit export sector showed unexpected signs of strength in October, posting the first increase since May on higher shipments to the United States while imports continued to disappoint.

Imports rose 1.6 per cent over September to US$244.6 billion, seasonally-adjusted, the highest since the Commerce Department began publishing the statistic in 1992.

Imports from China and Mexico were the highest on record in October.

The Trump administration has focused its trade policy efforts on lowering the trade deficit, arguing that the United States has been shafted in trade deals such as the North American Free Trade Agreement.

Imports dipped by 1.6 per cent on weaker demand for motor vehicles and parts amid work stoppages and planned shutdowns in the automotive industry. The trade deficit with Mexico surged 15.9 percent to $6.6 billion.

But trade deficits this year - which have reached $462.9 billion and are up 11.9 percent from last year - are on track to eclipse 2016 levels and will likely climb to more than $500 billion by year's end.

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