The U.S. Trade Deficit Rose to Its Highest Level in 5 Months, Reaching $50 Billion
The U.S. trade deficit increased for the second consecutive month in July, despite President Donald Trump’s efforts to lessen it through aggressive tariffs and new trade agreements. According to the Associated Press, the deficit reached $50.1 billion in July—the highest it’s been since February—after hitting $45.7 billion in June.
The trade deficit, calculated as the difference between what America exports and imports, was widened partially by increased imports of trucks and computers. AP reports that imports in July reached a record of over $260 billion.
Deficits with China, the European Union, and Canada each rose dramatically. With China, the U.S. deficit rose 10%; with the EU, 50%; and with Canada, almost 58%.
Trump has attempted to lessen the trade deficit since taking office, launching more aggressive tactics earlier this year when he put a 25% tariff on steel. He’s irritated China with tariffs on goods worth about $50 billion, and prodded the EU to retaliate with threats of over $20 billion in tariffs. Most recently, Trump has threatened to close a NAFTA deal with Mexico, excluding Canada.
America’s trade deficit with Mexico lowered by 25% in July, hitting $5.5 billion.
According to economists cited by AP, the trade deficit is a natural occurrence in an American society where people spend more than they produce, at least when it comes to material goods. In July, the U.S. had a deficit of $73.1 billion in goods like cars and machinery, but a surplus of $23 billion in services like education and banking.