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Trade deficit rises in April to $47.6B; China gap $27.6B & E Finance

2017-06-04 20:17 [ECONOMY] Source:Netword
Guide:WASHINGTON -- The U.S. trade deficit rose in April to the highest level since January. The politically sensitive trade gap with China registered a shar

WASHINGTON -- The U.S. trade deficit rose in April to the highest level since January. The politically sensitive trade gap with China registered a sharp increase.

The Commerce Department said Friday that the U.S. trade gap in goods and services climbed 5.2 percent to $47.6 billion in April from March. Exports dropped 0.3 percent to $191 billion, pulled down by a drop in automotive exports. Imports rose 0.8 percent to $238.6 billion as Americans bought more foreign-made cellphones and other consumer goods.

A widening trade deficit is a drag on economic growth. President Donald Trump made the trade gap -- the difference between exports and imports -- a centerpiece of his 2016 campaign. His administration has vowed to reduce the deficit, blaming it on abusive practices by America's trading partners.

Inflation-adjusted exports are "on course for annualized growth of only around 1 percent for the second quarter as a whole, compared to a likely gain of closer to 3 percent annualized for real imports," Andrew Hunter, an economist at Capital Economics, wrote in a note. "Nonetheless ... the survey data still suggest that real export growth should pick up again before long."

So far this year, the trade deficit is up 13.4 percent from a year earlier to $186.6 billion. Exports are up 6.1 percent to $765.6 billion this year, but imports are up more -- 7.5 percent to $952.2 billion. So far in 2017, the United States is running a $268.7 billion deficit in goods and an $82.1 billion surplus in services such as banking and tourism.

Trump recently has singled out Germany for criticism, saying it is unfairly benefiting from a weak euro. When a country's currency is weak, its products enjoy a price advantage in foreign markets. The trade deficit with Germany rose 4.3 percent in April to $5.5 billion.

The deficit in goods with China rose by 12.4 percent to $27.6 billion in April.

Lingering tensions over trade and investment between the EU and China, the leading U.S. trade partners, emerged on Friday as European officials pressed the Chinese government to tackle overcapacity in domestic industries such as steel and to ease restrictions on foreign investors.

At an EU summit Friday in Brussels, Chinese Premier Li Keqiang revived a Chinese call for talks on an EU-China investment accord to be accompanied by a move toward a broader free-trade agreement.

EU Trade Commissioner Cecilia Malmstrom highlighted Europe's stance that an investment accord is a condition for a push for a free-trade deal. She pressed Chinese authorities to make good on a pledge by President Xi Jinping to a global audience in January to open further the market in China.

Information for this article was contributed by Michelle Jamsirko and Jonathan Stearns of Bloomberg News.

Business on 06/03/2017

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