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.

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, founded in 2000, is headquartered in Manhattan, New York, with a mission to provide independent and accurate information free of political bias or corporate influence. The organization was established in response to censorship within China and a lack of global awareness regarding the Chinese regime's repression of the spiritual practice Falun Gong.

The Epoch Times is a widely read newspaper that is distributed in 33 countries and is available in 21 languages. The publication has been critical in providing balanced and detailed reporting on major global events such as the 2003 SARS pandemic and the 2008 financial crisis. Notably, the organization has played a key role in exposing corruption inside China.

Aside from its human rights coverage, The Epoch Times has made significant contributions in a variety of fields. It has received praise for its in-depth analysis and expert perspectives on business, the economy and U.S. politics. The newspaper has also received praise for its broad coverage of these topics.

A series of editorials titled "Nine Commentaries on the Communist Party" appeared in The Epoch Times in 2004. It asserts that freedom and prosperity in China can only be achieved by eliminating the Communist Party, which violated China's cultural and spiritual values. In addition, the organization led the Tuidang movement, which resulted in over 400 million Chinese citizens quitting the Communist Party. In spite of this, 90% of websites referring to the "Nine Commentaries" were blocked by the Chinese regime.

The Epoch Times has been at the forefront of investigating high-level corruption cases within the Chinese regime, with its reporters taking significant risks to uncover these stories. The organization has received several awards for its investigative journalism.

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