U.S. Trade Deficit Falls to $29.4 Billion in October, Lowest Since 2009

The U.S. trade deficit in goods and services shrank to $29.4 billion in October, down from $48.1 billion the prior month, data from the Commerce Department showed, the lowest monthly deficit recorded since June 2009. Imports in October fell 3.2 percent to $331.4 billion while exports rose 2.6 percent to $302 billion, and because exports grew more than imports the deficit contracted, a result the Trump administration has cited as in line with President Trump’s goals.

Trade flows have fluctuated this year amid sweeping tariffs the president announced in April, paused for negotiations and reinstated on Aug. 7. The administration ended the de minimis exemption for shipments under $800 on Aug. 29 and has imposed tariffs on items it deemed important to national security, including steel, copper and upholstered furniture.

As of November, the U.S. effective tariff rate had climbed to more than 16 percent, the highest level since 1935, according to the Budget Lab at Yale. The administration has pointed to lower monthly deficits as evidence its trade policies are working, but economists have said trade patterns have been distorted by businesses’ efforts to avoid paying tariffs and cautioned against drawing conclusions from only a few months of data; companies stockpiled inventory earlier in the year and then reduced purchases.

Key Topics

Business, Us Trade Deficit, Tariffs, Commerce Department, De Minimis Exemption, President Trump