US trade deficit rises more than expected in October and is now up 10% for 2018

The U.S. goods and services deficit increased more than expected in September amid escalating tensions with its global trading partners.

The shortfall rose to $54 billion for the month, a 1.3 percent increase, or $700 million, from August and reflective of a 10.1 percent increase year to date, according to government numbers released Friday. Economists surveyed by Refinitiv had been looking for a gain of $53.6 billion.

The goods deficit stood at $76.3 billion, the highest on record on a seasonally adjusted basis.

Exports increased to $212.6 billion, a $3.1 billion gain from August, while imports rose $3.8 billion to $266.6 billion.

Those numbers come as the Trump administration moved forward with a plan to tax $200 billion worth of Chinese imports and as China countered. In recent days, President Donald Trump has expressed hope that upcoming talks with Chinese President Xi Jinping can yield fruits on the impasse between the two nations.

Trump has expressed disdain for trade imbalances and has vowed to use tariffs as a way to reduce deficits and get agreements that are fairer to the U.S.

For all of 2018, the global trade deficit has increased $40.7 billion, a result of a $143.8 billion increase in imports and a $184.5 gain in imports.

On a three-month average, the goods and services shortfall rose 5.6 percent from the same period a year ago.

In China’s case, the goods and services deficit increased to $40.2 billion, the highest on record on a non-seasonally adjusted basis Year to date, the U.S. is running a $301.4 billion deficit with China. The closely watched soybean trade was reflective of the trade tensions, with the decline in September exports at $744 million from the previous month.

The goods and services deficit with Russia rose to $1.7 billion, the highest since May 2013.

The goods deficit with Mexico showed a sharp decline, falling $1.1 billion to $7.6 billion, a 12.6 percent slide. The move came almost entirely due to exports, which rose $1.1 billion to $22.5 billion. Imports were little changed, falling less than $100 million to $30.1 billion.

WATCH:Twelve US execs explain how Trump’s trade war affects their bottom lines