Economy

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The US trade deficit increased 3.1% to $71.2 billion in May as rebuilding inventories for rising demand in a reopening economy pulled in imports. Goods imports rose 1.2% to $234.7 billion and exports of goods gained 0.3% to $145.5 billion, a record high

US trade May 2021

US trade balance for the month of May 2021.

Goods (Census Basis, seasonally adjusted)

Exports

  • * May exports of goods ($145.0 billion) were the highest on record.
  • * May exports of foods, feeds, and beverages ($14.0 billion) were the highest on record.
  • * May exports of industrial supplies and materials ($52.3 billion) were the highest on record.
  • * May exports of consumer goods ($18.0 billion) were the highest on record.

Imports

  • * May imports of foods, feeds, and beverages ($15.4 billion) were the highest on record.
  • * May imports of industrial supplies and materials ($52.3 billion) were the highest since December 2014 ($53.1 billion

Country and Other Highlights (Census Basis, not seasonally adjusted)

Balance

  • * The May deficit with Canada ($3.7 billion) was the highest since December 2019 ($4.9 billion).

Exports

  • * May exports to South and Central America ($14.1 billion) were the highest since October 2019 ($14.2 billion).

Imports

  • * May imports from Taiwan ($6.4 billion) were the highest on record.
  • * May imports from India ($6.0 billion) were the highest on record.
  • * May imports from Russia ($2.7 billion) were the highest since May 2013 ($2.8 billion)

 

The great irony of this trade war is that the fallout is real and justifiable to all sides of politics, that tells you more about politics than anything. Before the Covid gloval shutdown we saw global PMI's collapse and growth collapse as countries turn inward. The trade gaps have subtracted percentage point from the annualized growth pace of gross domestic product during the period.

Now there are two arguments we need a trade war to bring the trade gap down down or  these tariffs working in fixing the problem. The answer probably lies in between. A strong US dollar negates much of the price affect, there lies a big problem for the US here and why the US interest rate differential supporting the US dollar is integral.

Source: bea

From The Traders Community News Desk

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