By STEVE BINDER
WASHINGTON, D.C. — America’s trade deficit fell 22.4 percent during June, driven in large part by a growing domestic energy supply and a boost in exports across the board.
Food products, while nowhere near as large a trade industry as energy or non-food consumer goods, nonetheless posted a nearly 1 percent gain for the month compared to the same period a year ago, pushing agriculture further into the black. Ag continues to remain the country’s only category with a trade surplus.
For the month of June, the United States exported $191.2 billion in goods, up about 2.2 percent over June 2012. Imports during the same periods totaled $225.4 billion, down about 2.5 percent, according to the Commerce Department.
The $34.2 billion trade gap is the lowest in more than 3.5 years, according to the report; it dropped nearly $10 billion from the total in May, which stood at $44.1 billion. Barry Bosworth, a senior fellow in economic studies at the Washington D.C.-based Brookings Institution, noted the exports increase is significant, especially in light of sluggish economies in Europe and China’s recent move to limit its imports.
“It’s a good trade report from the perspective of the improving export position of the U.S.,” Bosworth said. “All around the world I think you see the slowing of trade mainly because the markets in which people are trying to sell aren’t doing very well.”
He added if the United States continues to produce more natural gas and oil, as it has during the past two years, it should bring down the country’s trade deficit even more in the months and years to come.
One of the encouraging signs in the Commerce Department report is an overall 1.5 percent increase in goods shipped to the 27-nation European Union (EU). In the first five months of the year, exports to EU countries had nosedived 5.5 percent.
Exports to China, meanwhile, were up 5.5 percent for June alone, and through the year by almost 4.5 percent.
Bosworth noted the growing number of free trade agreements, most recently with South Korea, Columbia and Panama, continues to bolster U.S. export numbers, particularly in terms of food products.
China remains a bit of a puzzle, he noted, because the country began last year an effort to use more domestic products and cut back on imports. But in June, imports from the United States rose 4.5 percent, and for the first six months of the year China’s purchase of American goods are up 4.2 percent, according to the Commerce Department.
Given China’s growing population, and an estimate that its middle class will grow from 200 million to 600 million within 10 years, the country could become America’s largest customer, said John Frisbie, president of the U.S.-China Business Council.