US trade deficit surges in July to highest in 12 years

When Donald Trump campaigned for president in 2016 he pledged to sharply lower the country's large trade deficits, especially with China, which for years has been the country with the largest trade surplus with the United States. But despite a number of high-profile trade battles and a renegotiation of the North American Free Trade Agreement with Canada and Mexico, America's trade deficits have remained stubbornly high.

The U.S. trade deficit surged in July to USD 63.6 billion, the highest level in 12 years, as imports jumped by a record amount. The Commerce Department reported that the July deficit, the gap between what America buys and what it sells to foreigners, was 18.9 per cent higher than the June deficit of USD 53.5 billion.

The increase was driven by a record 10.9 per cent increase in imports which rose to USD 231.7 billion. Exports were also up but by a smaller 8.1 per cent to USD 168.1 billion. When Donald Trump campaigned for president in 2016 he pledged to sharply lower the country's large trade deficits, especially with China, which for years has been the country with the largest trade surplus with the United States.

But despite a number of high-profile trade battles and a renegotiation of the North American Free Trade Agreement with Canada and Mexico, America's trade deficits have remained stubbornly high. For July, the deficit with China in goods totaled USD 31.6 billion, an 11.5 per cent increase from the June imbalance.

The goods deficit with Mexico hit a record high of USD 10.6 in July. Trump has claimed the new free trade deal he has negotiated with Mexico and China will be a boon for American workers and businesses. The United States ran a deficit in goods trade of USD 80.1 billion in July, the highest on record.

The U.S. surplus in services, such as banking and insurance, declined to USD 17.4 billion, the smallest services surplus since August 2012..