Monthly US trade deficit widens to $41.9B

Monthly US trade deficit widens to $41.9B

The nation’s trade gap increased slightly in May on a drop in exports as U.S. firms struggle to sell their products in foreign markets. 

The trade deficit widened 2.9 percent to $41.9 billion, up from April’s $40.7 billion, the Commerce Department reported on Tuesday. 

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Exports declined 0.8 percent to $188.6 billion, on a slowdown in demand for commercial aircraft and machinery. 

May imports fell 0.1 percent to $230.5 billion. 

U.S. exporters are trying to bounce back from a major West Coast ports strike, a slow down in global growth and an increase in the dollar’s value, which has caused their products to be more expensive abroad. 

Trade was a drag on the U.S. economy in the first three months of the year, sapping 1.9 percent from growth. The economy contracted 0.2 percent in the January-March quarter. 

Economists estimate trade and the nation's strengthening economy will produce about a 3 percent growth rate in the April-June period. 

For the year, the trade deficit increased 0.5 percent or by $1.1 billion from the same period in 2014. 

Over that time, exports decreased $26.5 billion or 2.7 percent while imports fell $25.4 billion or 2.2 percent.

The deficit with China increased $3.1 billion to $30.6 billion in May. 

The U.S. trade gap with the European Union — which is in talks with the United States over another massive trade deal — increased $1.4 billion to $13.4 billion in May.

President Obama and congressional Republicans scored a major legislative victory last month when Congress cleared a trade promotion authority measure that will help streamline passage of a major Pacific Rim trade agreement, possibly some time this year. 

Under fast-track authority Congress will get an up-or-down vote on a final agreement and won't be able to amend the deal. 

Trade officials from the 12 nations engaged in Trans-Pacific Partnership (TPP) talks are set to meet at the end of July in Hawaii with the expectation that they will close out the remaining complex issues. 

If the deal is completed, the White House will have another major sell on their hands in convincing trade skeptics in Congress to back the deal that represents 40 percent of global growth. 

Obama is playing his part in smoothing completion of the TPP. 

He is meeting on Tuesday morning at the White House with Vietnam’s Communist Party leader Nguyễn Phú Trọng to discuss ways to improve the relationship between the two nations with the TPP as a likely focal point in those discussions.