The U.S. trade deficit in goods and services rose to a record high in June, largely due to a surge in imports as businesses built up inventories to meet robust consumer demand.
The Commerce Department said in an Aug. 5 statement (pdf) that the trade deficit—the difference between exports and imports of goods and services—rose by 6.7 percent in June, hitting an all-time high of $75.7 billion.
Imports climbed to a record high as well, rising by 2.1 percent over the month to $283.4 billion. Exports edged up by just 0.5 percent in June to $207.7 billion.
The June increase in the trade deficit was driven by a rise in the goods deficit of $4 billion to $93.2 billion and a drop in the services surplus of $700 million to $17.4 billion.
In the year-to-date, the trade deficit increased by 46.4 percent to $135.8 billion compared to the same period in 2020.
Some analysts believe that the trade deficit will taper in the coming months, as the surge in consumer spending associated with the re-opening of the economy wanes.
“With the peak in consumer goods demand behind us, we expect consumer goods imports to weaken from here, while survey measures of export orders support that exports growth is set to strengthen,” Michael Pearce, senior U.S. economist at Capital Economics, told The Associated Press.
The goods deficit with Europe surged by 23.5 percent to $28.1 billion in June, while the politically sensitive goods deficit with China—the largest the United States runs with any country—rose by 5.8 percent in June to $27.8 billion.
The year-to-date goods deficit with China totaled $158.5 billion, an increase of 19.2 percent compared to the same period in 2020.
Former President Donald Trump was an ardent critic of the U.S. trade deficit, which he blamed on bad deals negotiated by his predecessors and unfair trade practices by other countries, primarily China. One of the ways in which Trump sought to whittle down the trade deficit with China was 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 its pledge.
Through June, China purchased $68 billion in U.S. goods, compared to a year-to-date target of $99 billion, a shortfall of about 45.5 percent.
The Associated Press contributed to this report.