Momentous news on the trade front for our neighbour to the south: the U.S. trade deficit increased to a five-month high in July as exports of soybeans and civilian aircraft declined and imports hit a record high, suggesting that trade could be a drag on economic growth in the third quarter.
The increase was the biggest monthly widening since 2015.
Figures released Wednesday by the U.S. Commerce Department said the trade gap jumped 9.5% to $50.1 billion, widening for a second straight month. Data for June was revised to show the trade deficit rising to $45.7 billion, instead of the previously reported $46.3 billion.
The politically sensitive goods trade deficit with China surged 10% to a record $36.8 billion.
Economists had forecast the overall trade deficit swelling to $50.3 billion in July. The trade gap continues to widen despite the Trump administration's "America First" policies, which have left the United States embroiled in tit-for-tat tariffs with the European Union, Canada and Mexico as well as an escalating trade war with China.
President Donald Trump has defended the duties on steel, aluminum imports and a range of Chinese goods as necessary to protect American industries from what he says is unfair foreign competition.
