US trade deficit rises 1.9 percent as imports set new record | Coronavirus pandemic News


US imports of goods broke a record in January, rising to $68.2bn from $67bn in December, the US Department of Commerce said.

United States imports of goods broke a record in January and pushed the trade deficit 1.9 percent higher as the coronavirus pandemic distorted global commerce.

The gap between the goods and services the US sold and what it bought abroad rose to $68.2bn from $67bn in December, the US Department of Commerce reported Friday. Exports rose 1 percent to $191.9bn, while imports increased 1.2 percent to $260.2bn.

Imports of goods increased $3.4bn to a record $221.1bn in January, led by pharmaceuticals, which rose $5bn, or 39 percent, to $17.4bn. Imports of services fell about 1 percent.

US exports of goods rose $2.1bn to $135.7bn in January, while exports of services, like transport and travel, declined $0.3bn to $56.3bn.

The politically sensitive trade gap with China fell 3.2 percent to $27.2bn. The trade deficit with Mexico rose $1.6bn to $11.9bn in January.

The coronavirus has upended trade in services such as education and travel, sections of the economy in which the US runs persistent surpluses. Measured in dollars, monthly exports of US services have declined by nearly one-fourth since the virus outbreak about a year ago.

Year-over-year, the goods and services deficit climbed to $23.8bn, or 53.7 percent, from January 2020.

Last month, Commerce reported that in 2020, the US trade deficit rose 18.1 percent to $682bn, the highest since 2008, as the coronavirus threw global commerce into disarray and stymied then-President Donald Trump’s attempts to rebalance the US’s trade with the rest of the world.

Friday’s January trade data release is the last to include the period covering the Trump administration, which started a trade war with China and imposed steel and other tariffs on American allies that upended seven decades of US policy.

President Joe Biden and his team have so far tiptoed around Trump’s hardline trade policies. Biden hasn’t called off Trump’s trade war with China or suggested he would scale back the tariffs on imported steel and aluminium.

Biden’s pick for his administration’s top trade negotiator, Katherine Tai, has promised to make sure that US trade policy benefits US workers, not just corporations, and to engage more with US allies to counter an increasingly assertive China.

Tai is waiting to be confirmed by the full Senate. Fluent in Mandarin, she spent several years as the Office of the US Trade Representative’s head of China enforcement.

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