US Trade Deficit Hits Record High as Consumer Goods Imports See Sharp Rise

The Commerce Department said in an Oct. 5 statement that the trade deficit rose by 4.2 percent in August, hitting an all-time high of $73.3 billion.

learn more about The Epoch Times

By The Epoch Times

This story originally appeared on The Epoch Times

The U.S. trade deficit in goods and services rose to a record high in August, largely on the back of a rise in imports as businesses continued to build up inventories in response to strong consumer demand.

The Commerce Department said in an Oct. 5 statement (pdf) that the trade deficit—the difference between exports and imports of goods and services—rose by 4.2 percent in August, hitting an all-time high of $73.3 billion.

Imports rose 1.4 percent to $287 billion, while exports edged up 0.5 percent to $213.7 billion.

Consumer goods imports saw a relatively sharp rise of $2.7 billion in August, led by pharmaceutical preparations, industrial supplies and materials, organic chemicals, toys, games, and sporting goods.

Nicole Wolter, President and CEO of HM Manufacturing, which makes parts for power transmission and precision mechanical components, told NTD in an interview that robust demand has left many companies scrambling to fill orders amid shortages of materials and labor.

"It's rough. If it's not workforce, it's material. And if it's not material, it's your sub-components. And it just keeps trickling down," she said, adding that her firm has been forced to pass on some costs to customers.

Wolter said the supply crunch has exposed the vulnerability of globalized just-in-time supply chains.

"We've had to actually machine components that we don't normally do, just to get our customers out of a bind. It's crazy," she said, adding that she would like to see more reshoring of supply chain components to alleviate what she called a "very vicious cycle."

The Commerce Department report also showed that the politically sensitive goods deficit with China—the largest the United States runs with any country—rose by $3.1 billion in August to $28.1 billion.

Former President Donald Trump was deeply critical of the U.S.–China trade deficit, which he sought to whittle down by negotiating a deal built around a pledge by Beijing to buy $200 billion more in U.S. goods and services over 2020 and 2021.

According to the Peterson Institute for International Economics (PIIE), a nonpartisan research organization that tracks the status of China's purchases from the United States relative to its commitments, Beijing is well behind on this pledge.

For 2020, China's total import shortfall was $73.2 billion, or 58 percent of the target, according to PIIE, while through August 2021, Beijing was on track to end the year more than 30 percent short of its buying commitment.

U.S. trade representative Katherine Tai, the Biden administration's top trade negotiator, said Monday that the United States plans to launch new trade talks with China, while maintaining Trump-era tariffs and pushing Beijing to fulfill the import pledges.

Tai also vowed to press the Chinese regime for "frank" talks in a bid to end Beijing's unfair trade practices, speaking of the need to take "all steps necessary to protect ourselves against the waves of damage inflicted over the years through unfair competition."

She also said Washington would start a "targeted tariff exclusion process" to exempt some Chinese imports from punitive U.S. tariffs, with potential additional exclusion processes in the future.

By Tom Ozimek

Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'

The Epoch Times

The Epoch Times is the fastest-growing independent news media in America. We are nonpartisan and dedicated to truthful reporting.

We are free from the influence of any government, corporation, or political party—this is what makes us different from other media organizations. Our goal is to bring our readers accurate information so they can form their own opinions about the most significant topics of our time.

We don’t follow the unhealthy trend of agenda-driven journalism prevalent in today’s media environment. Instead, we use our principles of Truth and Tradition as our guiding light. We highlight in our reporting the best of humanity, the valuable lessons of history, and traditions that are beneficial for society.

The Epoch Times was founded in the United States in the year 2000 in response to communist repression and censorship in China. Our founders, Chinese-Americans who themselves had fled communism, sought to create an independent media to bring the world uncensored and truthful information.

The Epoch Times has received numerous awards for our reporting and design, including from the New York Press Association, the Society of Professional Journalists, and the Society for News Design.

The Epoch Times’ media network currently covers 21 languages and 33 countries.

Related Topics

Editor's Pick

This 61-Year-Old Grandma Who Made $35,000 in the Medical Field Now Earns 7 Figures in Retirement
A 'Quiet Promotion' Will Cost You a Lot — Use This Expert's 4-Step Strategy to Avoid It
3 Red Flags on Your LinkedIn Profile That Scare Clients Away
'Everyone Is Freaking Out.' What's Going On With Silicon Valley Bank? Federal Government Takes Control.
Leadership

How to Detect a Liar in Seconds Using Nonverbal Communication

There are many ways to understand if someone is not honest with you. The following signs do not even require words and are all nonverbal queues.

Celebrity Entrepreneurs

'I Dreaded Falling in Love.' Rupert Murdoch Is Getting Hitched for the Fifth Time.

The 92-year-old media tycoon announces he will wed former San Francisco police chaplain Ann Lesley Smith.

Leadership

How Great Entrepreneurs Find Ways to Win During Economic Downturns

Recessions are an opportunity to recalibrate and make great strides in your business while others are unprepared to brave the challenges. Here's how great entrepreneurs can set themselves up for success despite economic uncertainty.

Business Ideas

55 Small Business Ideas To Start Right Now

To start one of these home-based businesses, you don't need a lot of funding -- just energy, passion and the drive to succeed.

Starting a Business

Selling Your Business? Do These 6 Things Right Now.

If you want the maximum price you need to make these moves before you do anything else.

Business News

'Invest In That Future Now Before It's Too Late': Bill Gates Calls For Global Pandemic Response Team In Op-Ed

In the same month that the World Health Organization called the coronavirus a pandemic three years ago, billionaire Bill Gates reiterated his call for a "fire department for pandemics."