US Trade Deficit Widens On Olympics Royalty Payment

06 April, 2018, 07:02 | Author: Brooke Harris
  • Soaring US imports of industrial supplies and capital goods pushed the monthly US trade deficit up 1.6 percent to $57.6 billion seasonally adjusted

U.S. trade deficit showing no signs of improvement and frankly as a net importing nation, like the United Kingdom, will not be benefitting from any Dollars weakness.

A report released by the Commerce Department on Thursday showed the U.S. trade deficit widened by more than anticipated in the month of February.

Exports to the United States rose 1.9 per cent while imports increased by 3.3 per cent.

The report also showed the merchandise-trade gap with China, the world's second-biggest economy, narrowed to $34.7 billion in February from $35.5 billion.

Economists had expected the trade deficit to widen to USD56.8 billion from the USD56.6 billion originally reported for the previous month.

Trump between a rock and a hard place over trade issues.

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Canada's trade deficit unexpectedly rose to $2.69 billion in February from $1.94 billion in January as imports grew much faster than exports, Statistics Canada data indicated on Thursday.

"By our calculations, the tax legislation and two-year budget deal will add $205 billion to the federal budget deficit this year, which increases the nominal trade deficit by $75 billion", said Ryan Sweet, an economist at Moody´s Analytics in West Chester, Pennsylvania.

At 9:43 a.m. EDT (1343 GMT), the Canadian dollar was trading almost unchanged at $1.2772 to the greenback, or 78.30 US cents.

Still, the loonie has been boosted this week by optimism on a deal to revamp the North American Free Trade Agreement. Still, the so-called real trade deficit is above the fourth-quarter average of $66.81 billion. Citing the underperformance on trade, IHS Market lowered its first-quarter estimate for GDP growth a tenth of a point to 1.5 percent. There were also increases in exports of capital goods such as civilian aircraft and drilling and oilfield equipment.

Meanwhile, the growth in exports was driven by a 20 percent rebound in volatile aircraft industry and a 5 percent rebound in motor vehicles and parts after plant closures in January.

Overall, imports advanced to US$262 billion, boosted by capital goods, industrial supplies and materials, and foods, feeds and beverages.

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