US trade deficit hits record in June as imports balloon

[WASHINGTON] A surge in imports of industrial supplies drove the US trade deficit to a record in June, according to government data released on Thursday, a sign that global supply chains may be coming back online after the pandemic disruptions.

The trade gap widened by US$4.6 billion to US$75.7 billion, a nearly 7 per cent increase compared to May, the Commerce Department reported. That was higher than analysts had expected, and beat the previous all-time high set that month.

Imports of goods and services jumped US$6 billion, most of which was accounted for by the rise in industrial materials and supplies such as iron, steel and chemicals, as well as a US$1.2 billion increase in non-monetary gold.

US purchases of imported consumer goods, including cars, fell in the month, according to the report.

Exports also rose but gained just US$1.2 billion compared to May.

As the world's largest economy has reopened and recovered faster than other regions, American businesses have reported struggles getting a steady supply of input.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

"Supply chain disruptions are a risk but trade flows should rebalance as global economies come back online more completely," said Rubeela Farooqi of High Frequency Economics.

The lifting of pandemic restrictions allowed travel and tourism - categorised as a service export - to increase US$400 million in the month, according to the data.

The US trade deficit with China in goods alone narrowed slightly to US$27 billion, while gaps with the European Union, India and Japan all increased by around US$1 billion.

AFP