US imports increased by 11%, surging the trade gap up to $63.6 in the month, The Commerce Department.
America also observed an increase in exports. But the exports were much lesser than imports, contributing to the $10.1 billion jump. It was nearly 19% higher than June. Even though after this surge in trade is still below pre-pandemic level. This reflects the ongoing COVID-19 impact. Businesses continued to operate at limited capacity or ceased operations entirely. The movement of travelers across borders remained prohibited, said The Commerce department.
“A strong & sustained rebound in trade flows is uncertain given a still weak global growth and demand backdrop.” said Rubeela Farooqi High Frequency Economics.
“With the domestic and global recoveries looking vulnerable, we think trade will struggle to keep its strong pace. Downside risks are clear, and we expect total trade volumes to fall a record 14 percent in 2020.” said Jim Watson of Oxford Economics.
The increase in both imports and exports is a good sign in many ways. Pointing to stronger consumer spending at home and increased demand for American-made goods abroad. However, global trade is still considerably weaker compared to before the corona virus pandemic. Moreover, it will take time to recover. U.S. exports, for example, were 26% lower in July compared to the same month in 2019.
Imports of vehicles, parts and engines, industrial supplies and consumer goods also observed a surge. Petroleum imports also surged by $21.5 billion. The deficit of trade in service with China in the second quarter surged to $75.8 billion, while the gap with Mexico jumped to $15 billion, the report said.
