- Previous month -$73.1 billion revised to -$73.0 billion
- Goods trade balance -$102.84 billion vs -$96.56 billion
- Services surplus $24.3 billion vs. $24.2 billion last month
Other details:
- Exports +0.5% vs. +1.7% last month.
- Imports rose by +2.1% compared to +0.6% in the previous month.
- Total exports amounted to $266.6 billion compared to $265.279 billion last month.
- Total imports amounted to $345.39 billion, compared to $338.28 billion in the previous month.
- Capital goods imports amounted to $83.45 billion, compared to $80.188 billion in the previous month.
- Trade deficit with China -$30.12 billion vs. -$22.18 billion deficit last month.
- Oil import price in July $75.96 vs. $74.113 last month. +11.5% from $68.11 last year
Although the trade deficit is close to expectations, the trend in the trade deficit continues to increase (see chart above). If the US trade deficit is large, the “usual” reaction should be for the US dollar to fall. Why? If the US dollar falls, the price of imports rises and the relative value of US exports falls (they become cheaper abroad). The US dollar falls slightly after the report is released.
What may be happening is that US importers are buying ahead of the US election. Trump is in favor of imposing tariffs on goods imported into the US. Even Democrats are less opposed to tariffs than in the past. So, buy imports early to avoid the increased cost if import tariffs are imposed.
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