Is the Trump trade war finally working?
The US trade balance (deficit) shrank in September (from -$55.0bn to -$52.5bn), improving by 6.5% YoY - the biggest shrinkage in the deficit since Sept 2016...
Overall exports decreased 0.9% to $206 billion while imports slid 1.7% to $258.4 billion.
Trade with China has tumbled since the tariff war began in earnest in 2018. In the first nine months of 2019, merchandise imports from China are down 13.5% and exports to the country have dropped 14.6%, according to Commerce Department data.
The trade balance with China improved sequentially for the second month in a row, and has improved YoY for nine months in a row...
Merchandise imports from the Asian country fell 4.9% from the prior month to $37 billion, the lowest in more than three years, while U.S. exports to China dropped 10% to a five-month low, narrowing the deficit to a seasonally adjusted $28 billion.
The data reflect the Sept. 1 tariffs on about $110 billion in Chinese imports, largely hitting popular goods such as Apple watches, clothing, and shoes. Companies may have sought to avoid paying the higher prices by stocking up before the levies were imposed. Exports of soybeans -- which aren’t broken down by destination -- dropped by $1 billion during the month, while shipments of autos and parts fell by a similar amount.
Finally, we note that the U.S. has increasingly been getting a boost from domestic oil production and is now a net exporter. The data showed a petroleum surplus of $252 million in September - the first reading in positive territory in figures going back to 1978 - as imports declined.
Excluding the commodity, the goods deficit narrowed to $70.8 billion from $72.8 billion.