–New Records Set for U.S. Goods Exports and the Deficit With China

By Denny Gulino and Kevin Kastner

WASHINGTON (MNI) – The trade deficit was virtually unchanged in
August despite record goods exports and boost in services sales, the
Commerce Department reported Thursday, but the deficit with China also
broke a new record and imports from Japan were the highest since June,
2008.

The Census Bureau pegged the August goods and services deficit at
$45.6 billion, almost identical to a year earlier and just $17 million
narrower than July’s.

Imports of $223.2 billion showed firm increases in industrial
supplies, miscellaneous goods and some from foods and feeds, offset by
declines in autos and capital goods.

Exports of $177.6 billion, slightly less than July, showed large
gains in industrial supplies, foods and miscellaneous goods. In goods
alone, the $125.4 billion in exports set a record.

Exports were helped by $50.9 billion in sales of services, also
the highest on record. Exports of goods declined by $100 million.
Increases were recorded in business, professional and technical
services and travel was down somewhat. In a year U.S. sales of services
is up $4.5 billion.

Most striking, however, was the unilateral deficit with China,
higher than ever at $29 billion without seasonal adjustment, and
$189.3 billion for the year through August. Imports from China rose to a
record $37.4 billion for the month alone, slightly more than $2 billion
higher than July.

It is those continuing huge deficits with China that were cited
among the major reasons the Senate earlier in the week passed a law that
would empower the Treasury Department to identify so-called misaligned
currencies and allow sanctions for any undue trade advantages. The House
is not expected to follow suit and the Obama administration has major
concerns with the legislation.

The deficit with Japan rose to $6.7 billion in August from July’s
$5.3 billion, with imports from Japan up almost $2 billion. Year-to-date
monthly deficits with Japan add up to $38.5 billion.

Trade with Pacific Rim countries as a whole, including Australia,
was in the red by $35.6 billion in August.

Trade with Europe also was in deficit,by $9.9 billion, but that
narrowed from July’s $11 billion. The biggest part of that was Germany’s
$4.5 billion August deficit. Through August, the year’s deficit with all
of Europe is $78.8 billion, less than half of that with China alone.

The year-to-date deficit with the OPEC oil exporters, at $89.9
billion, is also less than half of that with China. The deficit with
OPEC rose to $13.3 billion in August from July’s $11.9 billion.

** Market News International Washington Bureau: 202-371-2121 **

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