US Trade Deficit Falls to $74 Billion in October

December 6, 2024 TruthUSA

Total deficit so far this year is up by more than 12 percent compared to 2023.

America’s trade deficit dipped in October from the previous month, with imports and exports falling more than usual, according to recent government data.

The trade deficit—when imports exceed exports—came in at $73.8 billion for October, the U.S. Bureau of Economic Analysis said in a Dec. 5 statement. This was 11.9 percent lower compared to September. Imports registered a larger four percent fall compared to the 1.6 percent drop in exports.

The big dip in imports came after buyers increased their purchases in September, according to a Dec. 5 post from accounting company KPMG.

“Manufacturers and retailers were stocking up to hedge against the threat of a port strike on the East Coast and to avoid another round of tariffs levied on China,” KPMG stated.

The decline of four percent was also the fourth largest drop in imports since the end of the 2007–08 Great Financial Crisis, according to KPMG.

Major import declines were seen in goods like computers, semiconductors, crude oil, pharmaceutical preparations, and automotive vehicles, parts, and engines.

Meanwhile, the 1.6 percent dip in exports was the “largest decline in eight months,” KPMG said. “Soft growth among the main U.S. trading partners and the strong dollar are to blame.”

Goods like computer accessories, passenger cars, industrial supplies and materials, consumer goods, and trucks, buses, and special-purpose vehicles saw a dip in exports.

Overall, the $73.8 billion trade deficit was higher than expected, the accounting company said.

“The trade deficit with the European Union improved by $6.7 billion, far and away the biggest advance since the data has been collected and due almost entirely to fewer imports. The deficit with China fell following last month’s scramble to avoid new tariffs,” it noted.

According to data from the U.S. Census Bureau, the United States has the largest trade deficit with China so far this year, followed by Mexico, Vietnam, Ireland, and Germany. America’s biggest trade surplus is with the Netherlands, with Hong Kong, UAE, Australia, and the UK rounding out the top five.

Canada, China, and Mexico make up key trade partners, with all three nations ranking among the top import source and export markets for the United States.

Tariffs and Trade Deficit

The year-over-year jump in trade deficit comes as President-elect Donald Trump has proposed a series of tariffs once he enters the White House.

“President Trump has an overtly nationalist and transactional approach to trade that will rely heavily on tariffs to reduce the size of the U.S. trade gap with the rest of the world generally—and particularly with China and the EU,” said a Nov. 13 post by Deutsche Bank.

It pointed out that America’s trade deficit has been widening over the past several years, especially since the COVID-19 pandemic.

Trump has proposed a tariff of 25 percent on all goods imported from Mexico and Canada, pointing out that the two nations have failed to control the inflow of illegal immigrants and drugs into America.

He also vowed to impose an additional 10 percent tariff on Chinese imports, over and above other tariffs, citing the failure of the communist regime to tackle fentanyl flows into the United States.

More recently, the president threatened 100 percent tariffs on the BRICS member nations, noting that the bloc presented a threat to the U.S. dollar.

“We require a commitment from these countries that they will neither create a new BRICS currency, nor back any other currency to replace the mighty U.S. dollar or, they will face 100 percent tariffs, and should expect to say goodbye to selling into the wonderful U.S. economy,” Trump said in a Nov. 30 Truth Social post.

During his presidential campaign, the Republican candidate had said that he plans to use tariffs to boost domestic manufacturing.

Some have warned against imposing such measures. California Gov. Gavin Newsom recently said during a press conference that the president-elect’s proposed tariffs would lead to prices of food, gas, oil, and other commodities rising.

“This is a regressive tax that will have a profound impact on progress and momentum that we’re starting to enjoy,” Newsom said.

Karoline Leavitt, the Trump-Vance transition spokeswoman, dismissed such concerns. “In his first term, President Trump instituted tariffs against China that created jobs, spurred investment, and resulted in no inflation,” she said to The Epoch Times.

While the trade deficit affects several sectors, agriculture is a key issue. In March, a group of Senate Republicans asked the federal government to tackle the agricultural trade deficit America is facing.

“U.S. agricultural exports declined by more than $17 billion, and recent forecasts show a further decline by more than $8 billion in FY 2024,” they wrote in a March 13 letter to government officials. “As a result, the U.S. agricultural trade deficit is projected to reach a record $30.5 billion in FY 2024.”

“This decline is unsustainable, and we urge the Biden administration to immediately take action to improve the competitiveness of U.S. agricultural products abroad and reverse this trend.”

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