US Trade Deficit Widens As Exports Hit 10-Year Low

The US trade deficit surged in April as the COVID-19 pandemic upended the global flow of goods and services, pushing exports to a 10-year low. The Commerce Department said on Thursday the trade deficit jumped 16.7 per cent to $49.4 billion. Economists polled by Reuters had forecast the trade gap increasing to $49.0 billion in April. Global lockdowns to slow the spread of COVID-19 have severely disrupted the movement of goods and services between countries, leading to sharp contractions in economic activity. Gross domestic product in the United States declined at a 5.0 per cent annualized rate in the first quarter, the steepest pace of contraction in output since the fourth quarter of 2008.

In April, exports dropped a record 20.5 per cent to $151.3 billion, the lowest since April 2010. Goods exports plunged 25.2 per cent to $95.5 billion, the lowest since September 2009. Exports of motor vehicles and parts fell to $3.8 billion, the lowest since March 1992. Shipments of consumer goods dropped to $10.4 billion, the lowest since April 2006.

Travel restrictions weighed on exports of services, which resulted in the surplus on the services account narrowing to $22.4 billion, the smallest since December 2016.

Imports dropped a record 13.7 per cent to $200.7 billion, the lowest since July 2010. Goods imports fell 13.6 per cent to $167.4 billion, the lowest since November 2010.

The import number has been shrinking as the United States waged a trade war with China. A sharp reduction in crude oil imports has also been a factor, with the United States becoming an oil exporter last year. The country posted a record $3.2 billion petroleum surplus in April.

In April, imports of automotive vehicles, parts, and engines dropped to $13.3 billion, the lowest since July 2009. Consumer goods imports fell to $43.8 billion, the lowest since August 2013. Petroleum imports declined to $6.1 billion, the lowest since June 1999.