U.S. Trade Deficit Narrows In Line With Estimates In September

U.S. Trade Deficit Narrows In Line With Estimates In September

The goods trade gap with China narrowed by US$100 million to US$31.6 billion, with exports to the country falling US$800 million in September and imports from China falling US$1.0 billion.

The ongoing trade war between the United States and China is harming both economies, the UN said Tuesday, with a sharp drop in exports and higher prices for consumers.

US and Chinese tariff hikes on billions of dollars of each other's imports have disrupted trade in goods from soybeans to medical equipment and battered traders on both sides.

The UNCTAD analysis, which only looked at the impact of the USA tariffs, found they had caused a 25-percent decline in U.S. imports of sanctioned Chinese products in the first half of 2019 alone.

The Commerce Department said Tuesday that the September gap between what America buys from overseas and what it sells shrank by 4.7% to $52.5 billion. For the first nine months of this year, the US deficit is running 5.4% below the same period a year ago.

Exports to the United States, China's biggest market, sank 16% to $44.4 billion under pressure from punitive tariffs imposed by President Donald Trump in a fight over Beijing's trade surplus and technology ambitions.

China's global trade surplus rose 25% from a year earlier to $34.8 billion.

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The European Union gained about $2.7 billion due to increased exports, largely in the machineries sectors.

The decision to go ahead with talks despite the latest tit-for-tat tariff hikes on September 1 encouraged global financial markets.

The sector hit hardest by the U.S. tariffs is USA imports of Chinese office machinery and communications equipment, which fell by $15bn. That would extend penalties to nearly everything the United States buys from China.

Again on September 24, 2018, tariffs of 10% on Chinese goods valued at $200 billion entered into force and were scheduled to increase to 25% in January, but President Trump postponed the increase because of the good progress of negotiations between the two countries. However, despite the substantial tariffs, the competitiveness of Chinese firms has enabled the country to maintain 75% of its exports to the U.S. Some have been hit with increases a couple of times, while about $50 billion of USA goods is unaffected, possibly to avoid disrupting Chinese industries.

The U.S. and China agreed in October on the outlines of an initial trade accord and Trump waived a set of planned tariff increases.

In a continuation of recent trends in large part driven by Trump's trade war with Beijing, US imports from China declined further as purchases from Mexico surged again.

The Chinese government has agreed to narrow its trade surplus with the US but is reluctant to give up development strategies it sees as a path to prosperity and global influence. "Chinese leader Xi and President Trump will do signing!" Trump has warned that if he is re-elected, China will face a tougher US negotiating stance.

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