The U.S. trade deficit jumped to a 10-year high in October as soybean exports continued to fall and imports of consumer goods rose to a record high, suggesting the Trump administration’s tariff-related measures to shrink the trade gap likely have been ineffective.
The Commerce Department said on Thursday the trade deficit increased 1.7 percent to $55.5 billion, the highest level since October 2008. The trade gap has now widened for a five straight months. Data for September was revised to show the deficit rising to $54.6 billion instead of the previously reported $54.0 billion.
The politically sensitive goods trade deficit with China surged 7.1 percent to a record $43.1 billion in October.
The United States is locked in a bitter trade war with China. Washington has imposed tariffs on $250 billion worth of Chinese imports to force concessions on a list of demands that would change the terms of trade between the two countries.
China has responded with import tariffs on U.S. goods, including soybeans. President Donald Trump has long railed against China’s trade surplus with the United States, and accuses Beijing of not playing fairly on trade.
In addition to the duties on Chinese goods, Washington has slapped tariffs on steel and aluminum imports into the United States this year. Last Saturday, Trump and Chinese President Xi Jinping agreed to hold off on imposing more tariffs for 90 days while they negotiate a deal to end the trade dispute.
Economists polled by Reuters had forecast the overall trade deficit rising to $55.0 billion in October. When adjusted for inflation, the goods trade deficit increased to $87.9 billion in October from $87.2 billion in September. The so-called real trade deficit is above the average for the third quarter.
This suggests trade will probably be a drag on gross domestic product in the fourth quarter, and adds to weak housing and business spending on equipment reports in signaling a slowing down in economic growth. Trade subtracted 1.91 percentage points from GDP growth in the July-September quarter.
Growth estimates for the fourth quarter are around a 2.8 percent annualized rate. The economy grew at a 3.5 percent pace in the third quarter.
In October, exports of goods and services slipped 0.1 percent to $211.0 billion. Soybean exports, which have been targeted by China in the trade dispute, dropped $0.8 billion. Exports of civilian aircraft and engines also fell.
But exports of petroleum and consumer goods were the highest on record. A strong dollar is probably restraining overall export growth.
Imports of goods and services rose 0.2 percent to $266.5 billion, an all-time high. Consumer goods imports increased by $2.0 billion to a record high of $57.4 billion, boosted by a $1.5 billion jump in imports of pharmaceutical preparations.
Motor vehicle imports were the highest on record in October, as were imports of other goods.
Imports are being driven by strong domestic demand as well as the strong dollar, which is making the prices of imported goods cheaper, likely offsetting the impact of tariffs.
FedEx sues US government over shipment restrictions
American logistics giant FedEx sued the US government on Monday, saying Washington's restrictions on exports and imports due to growing trade disputes and sanctions created an "impossible burden" for delivery firms.
The announcement of the lawsuit comes as Beijing and Washington face off in a trade war that has seen both sides exchange steep tariffs on hundreds of billions in exports.
The US has also sought to bar Chinese telecom giant Huawei from the American market and limit its ability to purchase US technology.
A statement by the delivery firm said the restrictions placed "an unreasonable burden on FedEx to police the millions of shipments that transit our network every day" or face heavy fines.
New report targets 15 House Democrats who ‘deserve’ progressive primary challengers
As progressive candidates continue to announce their intentions to oust corporate Democrats, a new report names 15 House Democrats to unseat in primary challenges.
Published Monday by the left-leaning group RootsAction, the new report is entitled Bad Blues: Some of the House Democrats Who Deserve to Be 'Primaried.'
The list, the report notes, "is by no means exhaustive—only illustrative."
"There may well be a Democratic member of Congress near you not included here who serves corporate interests more than majority interests, or has simply grown tired or complacent in the never-ending struggles for social, racial, and economic justice as well as environmental sanity and peace," the report notes. "Perhaps you live in a district where voters are ready to be inspired by a progressive primary candidate because the Democrat in Congress is not up to the job."
‘A true public health emergency’: 70+ medical groups sound alarm on climate crisis
Groups lay out action agenda to advance climate solutions and strengthen resiliency
Scores of medical groups on Monday called the climate crisis "a health emergency" and laid out what they framed as a blueprint for the public and private sector to take swift action.
The agenda is signed by over 70 groups, including the American Medical Association, American Heart Association, Physicians for Social Responsibility, and the National Association of Social Workers.