The U.S. trade deficit shrank 2.7% in August 2017, declining from a downward revised $43.6 billion in July to to $42.4 billion in August, better than the $42.7 billion expected, as exports increased by 0.4% to $195.3 billion and imports decreased by 0.1% to $238.1 billion. This was the smallest trade deficit since last September, and was the result of a decline in the goods deficit by $0.9 billion to $64.4 billion, offset by an increase in the service surplus $0.3 billion to $22.0 billion. The US trade deficit excluding petroleum products was $37.55 billion.
Breaking down the details, Exports of goods and services increased $0.8 billion, or 0.4 percent, in August to $195.3 billion. Exports of goods increased $0.6 billion and exports of services increased $0.2 billion.
- The increase in exports of goods mostly reflected increases in consumer goods ($1.0 billion) and in capital goods ($0.4 billion). Decreases in industrial supplies and materials ($1.0 billion) and in food, feeds, and beverages ($0.4 billion) partly offset the increases.
- The increase in exports of services mostly reflected increases in travel (for all purposes including education) ($0.1 billion), in other business services ($0.1 billion), which includes research and development services; professional and management services; and technical, trade-related, and other services, and in financial services ($0.1 billion). A decrease in transport ($0.2 billion), which includes freight and port services and passenger fares, partly offset the increases.
Imports of goods and services decreased $0.4 billion, or 0.1 percent, in August to $237.7 billion. Imports of goods decreased $0.3 billion and imports of services decreased $0.1 billion.
- The decrease in imports of goods mostly reflected decreases in industrial supplies and materials ($0.5 billion) and in capital goods ($0.5 billion). An increase in automotive vehicles, parts, and
engines ($0.7 billion) partly offset the decreases.
- The decrease in imports of services mostly reflected a decrease in transport ($0.2 billion). An increase in travel (for all purposes including education) ($0.1 billion) partly offset the decrease.
Finally, broken down by geography, the August figures show surpluses with South and Central America ($2.7), Hong Kong ($2.5), Singapore ($0.8), United Kingdom ($0.6), and Brazil ($0.4). Meanwhile, deficits were recorded with China ($29.7), European Union ($10.9), Japan ($6.3), Mexico ($5.8), Germany ($4.8), Italy ($2.5), South Korea ($2.1), India ($1.6), Taiwan ($1.5), France ($0.8), OPEC ($0.8), Canada ($0.4), and Saudi Arabia ($0.1).
However, what may be more interesting to Trump will be that in the last report, the US deficit with China actually decreased by $2.1 billion to $29.7 billion, as exports increased $0.8 billion to $11.6 billion while imports decreased $1.2 billion to $41.3 billion. In more good news for US manufacturers, the deficit with the European Union decreased $1.2 billion to $10.9 billion in August. Exports increased $1.4 billion to $24.2 billion and imports increased $0.2 billion to $35.1 billion.