In September, a larger-than-expected trade deficit was reported despite the rise in exports. The deficit with China increased, highlighting the dependency of the US on Chinese goods notwithstanding the deteriorating relations between the countries.
In September, the United States witnessed a notable increase in exports, totalling $261.1 billion (+$5.7 billion vs August). Concurrently, September imports rose to $322.7 billion (+$8.6 billion vs August). This upturn in the goods and services deficit for September is attributed to a $1.7 billion expansion in the goods deficit, reaching $86.3 billion, coupled with a $1.2 billion contraction in the services surplus, which settled at $24.8 billion.
Year-to-date, there has been a marked improvement in the goods and services deficit, exhibiting a decrease of $147.4 billion, equivalent to a 20.0 per cent reduction compared to the corresponding period in 2022. Noteworthy is the 1.0 per cent increase in exports, amounting to $22.7 billion, and the 4.2 per cent decrease in imports, which contracted by $124.8 billion. The U.S. trade balance, however, experienced a deterioration than anticipated, dropping to -$61.5 billion from -$58.7 billion.
Examining the cumulative data for the first nine months of 2023, the U.S. trade deficit has contracted by 20 per cent in comparison to the corresponding period in the previous year. This contraction can be attributed primarily to a marginal increase in exports and a substantial decline in import values. Despite this overall improvement, the trade deficit with China escalated to $28.4 billion, marking its highest level since October 2022. Imports from China reached $40.3 billion, representing the highest figure since October 2022. The data underscores the continued dependence of the United States on China, while the prevailing tensions between the two nations present challenges for fostering robust trade relations.