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Richmans' Trade and Taxes Blog
U.S. Trade deficit with China improved slightly in August
According to numbers released on Thursday by the Commerce Department, the U.S. trade deficit with China improved slightly in August, after 23 months of steady deterioration as shown in the graph below:
In August, the U.S. merchandise trade deficit with China was $28.89 billion compared to $28.96 billion in August of 2011. Summed over the last twelve months, the U.S. merchandise trade deficit with China was $309.3 billion in August.
The slight improvement in the U.S. merchandise trade deficit with China may be partly due to Republican candidate Mitt Romney making U.S.-China trade an issue in the election. After weakening the yuan from January 1 (6.29 yuan per dollar) to July 1 (6.35 yuan per dollar) which would tend to worsen the U.S. trade deficit, the People's Bank of China strengthened the yuan to 6.27 yuan per dollar on October 14.
Meanwhile, the rest of the August trade report was dismal. Imports declined slightly ($0.7 billion) suggesting that the U.S. economy is flat. Exports declined more rapidly ($2.1 billion), suggesting that the world economy may be slowing.
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