While Trump is pushing to reform NAFTA even as the trade war with China gets worse, there was more bad news for Trump's trade agenda this morning, when the Advance Goods Trade Deficit came in at $72.2BN, worse than the $69BN consensus print, and just shy of the highest forecast (the range was $66BN to $72.5BN). It was also the biggest deficit since the record hit in March, and is fast approaching the record deficit print of $76 billion.
Imports rose 0.9% in July to $212.2BN from $210.4BN in June, while exports fell 1.7% in July to $140.0BN from $142.5BN in June.
But more troubling is that this was the biggest monthly in crease since March 2015.
Needless to say, for an administration that is desperate to shrink the US trade balance, this is an ominous sign and an indication that after some initial success in early 2018, Trump's policies appear to have reversed, perhaps as a result of the recent spike in the US Dollar, which may explain Trump's recent eagerness - and Powell's commentary - to moderate the strength of the greenback.