U.S. Trade Gap Narrows for First Time in 2021 as Exports Jump
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The U.S. trade deficit narrowed for the first time this year in April as the value of goods and services exports climbed and imports fell.
The gap in trade of goods and services narrowed 8.2% to $68.9 billion in April from a revised $75 billion in March, according to Commerce Department data released Tuesday. That compares with a median estimate for a shortfall of $68.7 billion in a Bloomberg survey of economists.
Exports increased to $205 billion, the most since January 2020, while imports dropped to $273.9 billion.
The data show a pullback in imports after demand from American consumers stuck at home during the Covid-19 pandemic sent U.S. purchases to repeated records. At the same time, improving economies overseas are beginning to drive demand for U.S. products and services. U.S. shipments of merchandise to foreign customers climbed to the highest on record.
Ports across the world have been clogged and freight rates have soared to all-time highs amid a dearth of pallets and containers.
Automakers in April said they had deepened and extended production cuts at some North American plants as they cope with a worsening global shortage of computer chips. The semiconductor shortage comes after a surge in orders for items such as smartphones, TVs and computers left less capacity for a stronger-than-expected rebound in vehicle demand.
President Joe Biden is proposing $50 billion for chip manufacturing and research as part of a push to address the shortage. His administration is exploring how to help chipmakers and buyers share supply-chain information to alleviate the crisis until more supply comes available, which could take years.
- U.S. exports were driven by a $1.4 billion increase in shipments of aircraft and a $981 million advance in crude oil
- The value of automotive-vehicle exports retreated almost 8% to $11.9 billion. Vehicle imports also declined, dropping by $1 billion to $29.4 billion as global manufacturers contended with shortages of chips
- Also reflecting the demand for semiconductors, the value of U.S. goods imports from Taiwan, a major chip exporter, surged to a record $6.2 billion
- With lumber prices reaching fresh records amid a construction boom and housing shortage in the U.S., the value of imports of the building material climbed to a record $1.4 billion in April
- The merchandise-trade deficit narrowed to $86.7 billion from a record $92.9 billion in March, while the nation’s surplus in services trade narrowed to $17.8 billion
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