WASHINGTON—The U.S. goods trade deficit increased by the most it has in more than a year in March as a record drop in exports offsets a shrinking import bill, suggesting the CCP virus outbreak was upending the global flow of goods and services.
The Commerce Department said on May 5 the trade deficit jumped 11.6 percent, the largest rise since December 2018, to $44.4 billion. Data for February was revised to show the trade gap tightening to $39.8 billion instead of $39.9 billion as previously reported.
Economists polled by Reuters had forecast the trade gap increasing to $44 billion in March.
Global lockdowns to slow the spread of COVID-19 have depressed demand for goods and services, causing economies to contract. In the United States, gross domestic product declined at a 4.8 percent annualized rate in the first quarter, the steepest pace of contraction in output since the fourth quarter of 2008.
The politically sensitive goods trade deficit with China dropped to $11.8 billion in March, the lowest since March 2004.
In March, exports dropped a record 9.6 percent to $187.7 billion, the lowest since November 2016. Goods exports tumbled 6.7 percent, the most since December 2005, to $128.1 billion. There were decreases in exports of capital goods, which fell to their lowest level since November 2016.
Exports of motor vehicles and parts were the lowest since November 2011, while shipments of consumer goods hit a seven-year low in March. Exports of services tumbled to their lowest level since November 2013, likely reflecting travel restrictions because of COVID-19.
Imports dropped 6.2 percent to $232.2 billion, the lowest since November 2016. The percentage declines in imports was the biggest since January 2009. Goods imports fell 2.3 percent to $193.7 billion in March, the lowest since August 2017.
The import number has been shrinking as the United States waged a trade war with China. A sharp reduction in crude oil imports has also been a factor, with United States becoming an oil exporter last year. The country posted a record $2.1 billion petroleum surplus in March.
Tensions have flared up between Washington and Beijing over the origins of the CCP virus, raising fears of an escalation in the trade war between the two economic giants.
Secretary of State Mike Pompeo said on May 3 there was “a significant amount of evidence” that the CCP virus emerged from a Chinese laboratory. An editorial in China’s state-run Global Times said he was “bluffing.”
In March, imports of goods fell to $192.4 billion, the lowest since August 2017. Imports of automotive vehicles, parts, and engines dropped to $27.8 billion, the lowest since February 2015. Consumer goods imports fell to $47.4 billion, the lowest since April 2016. Petroleum imports slipped $12 billion, the lowest since May 2016.
Imports of services amounted to $38.5 billion in March, the lowest since August 2013.
By Lucia Mutikani.
Epoch Times staff contributed to this report.