The deficit applied to international trade in goods and services decreased by 7.6% during the month of October, reaching 47,200 million dollars, which is the minimum level in the last 16 months thanks to the fall in imports.
In October, exports fell by 0.2% to 207.1 billion dollars, while imports fell even further, by 1.7% to 254.3 billion dollars, the Department of Commerce reported today.
The fall in imports was especially significant in consumer goods, such as cell phones (4.2%), toys (10.1%) and clothing (9.2%).
The trade deficit is the lowest recorded in the country since May 2018.
However, in the first ten months of this year the accumulated imbalance stood at $520.1 billion dollars, 1.3%, above the $513 billion dollars recorded in the same period of 2018.
The politically sensitive trade deficit with China fell by 1.1% to 31.3 billion dollars and has accumulated a 14.6% drop so far this year.
Even so, and despite the protectionist measures adopted by President Donald Trump, especially because of the trade war that has been going on for more than 17 months with China, the foreign trade deficit is on a trajectory that points to a negative balance in 2019 greater than that of 2018.
Although Beijing and Washington continue to negotiate “a first phase” of the trade pact, of which few details have been disclosed, on 15 December a new round of 15% tariffs on Chinese imports worth 165,000 million dollars is scheduled to enter into force.
“Almost two-thirds of all the fall in imports is in this area, where the imposition of tariffs on September 1 seems to have triggered an abrupt, albeit temporary, decline,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note to clients.
The most recent announcements of additional levies have been added to the global uncertainty scenario.
This week, Trump announced the re-imposition of tariffs on imports of steel and aluminum from Brazil and Argentina, and the application of others of up to 100% to imports from France worth $2.4 billion.
Despite the president’s promises to rebalance the deficit which, in his opinion, responds to the unfair treatment given by its trading partners, the truth is that it has not been reduced and closed 2018 in the largest record since 2008.
In fact, economists consider that the trade balance is not a significant indicator of a country’s economic health.
The United States, as the world’s largest economy, tends to see deficits historically rise during good times as Americans’ appetites for imports increase.
The dispute between the world’s two largest economies has consequences around the world, and both have seen their growth rates slow in recent months.
The national economy slowed in the third quarter, according to the second official estimate, at an annual rate of 2.1% compared to 3.1% at the beginning of the year.
China’s gross domestic product (GDP) rose by 6% year-on-year in the third quarter of 2019, the worst quarterly figure since March 1992, when this data began to be officially recorded in the Asian giants.
In its latest global growth forecasts, the International Monetary Fund (IMF) lowered its global expansion projections in October to 3.2% this year, one tenth less than in April, as a result of the “trade tensions” between Washington and Beijing.