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Sawt Falasteen - US September trade deficit widest in over two years

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US September trade deficit widest in over two years
US September trade deficit widest in over two years / Photo: Bryan R. SMITH - AFP/File

US September trade deficit widest in over two years

ECONOMY 05.11.2024

The US trade deficit expanded in September to its widest since early 2022 as imports increased while companies stocked up ahead of possible disruptions like a dockworkers' strike, according to government data released Tuesday.

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The world's biggest economy saw its trade gap jump 19.2 percent to $84.4 billion, said the Department of Commerce, with imports growing by 3.0 percent.

The expansion was significantly more than a market consensus of $74.0 billion forecast by Briefing.com.

The rise in imports came ahead of the year-end holiday season, and may be due to companies stocking up in anticipation of a dockworkers' strike.

"We should see some payback over the next couple of months," Ryan Sweet of Oxford Economics told AFP.

"The widening in the trade deficit isn't any cause for concern," he added.

But looking ahead, analysts have also noted that companies might be increasing imports in anticipation of the outcome of the US presidential election.

US polling stations opened early Tuesday on Election Day, as Americans cast their ballots for Democrat Kamala Harris or Republican Donald Trump, who threatened massive tariffs during the campaign, particularly on goods from China and Mexico.

His proposals also included levies on all imports, a scenario that companies have been bracing for.

"The trade gap with China widened in September," said economists Carl Weinberg and Rubeela Farooqi of High Frequency Economics in a note.

"The surge in imports may reflect efforts to get goods in from China before January, just in case a change in government brings higher tariffs and more restrictions on imports," they added.

Sweet said: "Businesses will likely front-load ahead of any tariffs and this front-loading could be a key theme next year if Trump wins."

But he added that even though Trump is expected to use tariffs aggressively, it will take time for these to be implemented even if he wins a second term.

The US trade deficit in September was the largest since April 2022, according to Commerce Department data.

Imports came in at $352.3 billion in September, boosted by areas like consumer products and items such as computers and semiconductors.

Exports, meanwhile, were $267.9 billion, $3.2 billion below the level in August.

This came as exports of civilian aircraft and pharmaceutical preparations both slumped.

In August, the revised trade deficit was $70.8 billion.

A.AlHaj--SF-PST

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