U.S. Trade Deficit Narrowed In July

By Agence France-Presse The U.S. trade deficit narrowed in July as imports fell for the first time in almost a year, the Commerce Department reported Sept. 10. The deficit fell 8.9% to $50.1 billion in July, the sharpest decline in the deficit since December 2001. Despite the decline, July's trade gap is still the second highest on record. "The awesome trade chasm narrowed a bit, but it is so wide that we cannot be too happy," said Joel Naroff at Naroff Economic Advisors. "The situation is horrible. Still, I like the trend as exports expanded while imports fell. We sold more capital goods, industrial supplies and vehicles to the rest of the world." U.S. industrial leaders have argued that the dollar needs to fall further to allow the trade deficit to come down. "While the narrowing of the trade balance in July is certainly welcome news, it is clear that the U.S. external deficit remains headed in the wrong direction," said Clifford Waldman, economist for the Manufacturers Alliance/MAPI. "The 11% decline in the broad dollar since its recent peak in February 2002 is simply not enough to materially adjust the terms of trade between the U.S. and the rest of the world." Imports declined for the first time in eleven months, falling 1.4% to $146 billion. Exports rose 3.0% to $95.9 billion. The trade deficit with China widened to $14.9 billion in July compared with $11.4 billion in the same month last year. The gap with Japan widened to $6.44 billion. The U.S. deficit with the European Union dipped slightly to $9.96 billion in July from $10.05 billion a month earlier. Exports of goods alone rose 4.3% to $67.5 billion and exports of autos and auto parts set a new record of $7.6 billion. Copyright Agence France-Presse, 2004