Trade deficit widens to $41.1B in May



07/06/16 01:14 PM EDT

The U.S. trade deficit jumped in May, as exports were hampered by the strengthening U.S. dollar and imports from China surged.

The May deficit increased 10.1 percent to $41.1 billion, compared to April's $37.4 billion, the biggest increase since August and the highest level since February, the Commerce Department reported Wednesday.

Exports fell 0.2 percent to $182.4 billion, while imports rose 1.6 percent to $223.5 billion.

The increasing value of the U.S. dollar — especially in the wake of the United Kingdom’s vote to leave the European Union — is weighing on the trade balance, making imports relatively inexpensive while pushing up the price of American exports abroad.

U.S. businesses purchased more cars, cellphones and industrial supplies from abroad, especially from China, in May.

The trade deficit for the first five months of 2016 is $200.4 billion, which is slightly below the $207.6 billion during the same period last year.

Trade has become a major issue in the presidential campaigns, as Republican and Democratic camps each take swings at the direction of U.S. trade policy and its impact on jobs and economic growth at home.

Presumptive Republican presidential nominee Donald Trump has delivered scathing reviews on trade and is vowing to pull the United States out of deals such as the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) if the U.S. doesn’t renegotiate their terms.

Commerce Secretary Penny Pritzker said on Wednesday that expanding global trade is imperative to better jobs and economic growth.

Pritzker said the TPP and the Transatlantic Trade and Investment Partnership between the United States and the European Union "are important tools to strengthen our economy by supporting the competitiveness of American workers and the ability of our businesses to trade on equal footing."

Those trade stances have landed Trump in hot water with the trade-friendly U.S. Chamber of Commerce, which made a point-by-point rebuke of the business mogul's statements after a series of trade addresses last week.

Trump has tapped into Americans' economic anxiety in arguing that the Obama administration has failed to protect U.S. workers from China's unfair trade practices.

The latest trade report showed the U.S.-China trade gap jumped 19.4 percent to $29 billion in May, behind a 13.8 percent increase in cellphone imports.

The overall deficit with China is running 6.4 percent below last year's pace, although the deficit is still the largest with any single country.

And while oil imports fell by volume in May, an increase in prices contributed to the expanded trade gap in May.

Meanwhile, exports to the European Union fell 4.2 percent, while exports dropped sharply — 15.6 percent — to the United Kingdom.

http://thehill.com/policy/finance/tr...to-411b-in-may