United States (US) Trade Deficit Widens

    JN Fund Managers
    JN Fund Managers

    The United States (US) Trade Deficit rose by 9.5% in July to US$50.1B. When adjusted for inflation, the deficit increased to a five-month high of US$82.5B, its biggest monthly widening since 2015. The widening was attributed to a decline in exports of soybeans, as its largest buyer, China, imposed retaliatory tariffs; coupled with imports hitting a record high. We believe that the tax cuts implemented under the Trump Administration, is likely to boost consumer and business spending on imports. This coupled with a stronger US dollar and slowing global economic growth outside the US, may result in a continued widening of the deficit. If this trend is to continue in August and September, then this would place downward pressure on fourth quarter gross domestic product (GDP) for the US.

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