Trade deficit remains stubbornly high amid escalating global tensions

Finance news

The U.S. deficit with its global trading partners edged lower in June but was bigger than expected ahead of an escalating trade war with China.

A government report Friday showed a $55.2 billion shortfall, down $200 million from the previous month as a $4.6 billion drop in imports offset a $4.4 billion increase in imports. Economists surveyed by Dow Jones had estimated a bigger drop to $54.6 billion.

Trade with China was little changed, with the $30 billion deficit reflecting a $200 billion decline from May.

The numbers came amid efforts through the month to resume trade negotiations prior to the G-20 summit, when the U.S. and China agreed to restart talks aimed at halting a tariff battle that began in 2018.

President Donald Trump on Thursday ordered 10% tariffs on an additional $300 billion or so of Chinese goods, essentially putting duties on all imports to the U.S.

Trump has made reducing the trade deficit a major priority. However, the shortfall has increased 7.9%, or $23.2 billion, from a year earlier.

Exports contracted across the board, with the biggest dollar decrease of $1.9 billion coming in consumer goods. Gem diamond exports fell $800 million and jewelry declined $400 million. Computer accessories fell $400 million and auto vehicles, parts and engines decreased $500 million.

Industrial supplies and materials imports fell by $3.2 billion, which included a $1.4 billion drop in crude oil shipments into the U.S. Cellphones and related household good imports decreased $1.4 billion.

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