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8mo ago

US Trade Deficit Shrinks by 11.9% in October as Imports Decline

The narrowing trade gap, driven by falling imports, could boost GDP growth but raises questions about future trade policies under President-elect Trump.

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The US trade gap narrowed 11.9 percent in October, government data showed
WILMINGTON, CALIFORNIA - DECEMBER 04: An aerial view of newly imported cars parked at the automobile terminal at the Port of Los Angeles on December 4, 2024 in Wilmington, California. U.S. President-elect Donald Trump is threatening new tariffs on multiple countries as his second term approaches after making tariffs a signature of his 2024 Presidential campaign. The ports of Los Angeles and neighboring Long Beach is the country’s busiest container port complex. (Photo by Mario Tama/Getty Images)

Overview

  • The US trade deficit fell to $73.8 billion in October, down from a revised $83.8 billion in September, exceeding economists' expectations.
  • Imports decreased by 4%, the largest drop since late 2022, with declines in capital goods, consumer goods, and petroleum imports.
  • Exports also declined by 1.6%, with notable decreases in shipments of automobiles, industrial supplies, and capital goods.
  • Economists suggest the smaller trade gap could support GDP growth, though reduced export volumes may weigh on industrial production and services output.
  • President-elect Donald Trump has pledged aggressive trade policies, including new tariffs on Mexico, Canada, and China, raising uncertainty about future trade dynamics.