Trade gap widens to $44B amid coronavirus pandemic

Trade gap widens to $44B amid coronavirus pandemic

The U.S. trade deficit increased to $44.4 billion in March during the coronavirus pandemic, an 11.6 percent increase from February, the Commerce Department announced Tuesday.

The gap between sales and purchases abroad by the U.S. increased from $39.8 billion in February, The Associated Press reported. Exports dropped nearly 10 percent to $187.7 billion, driven largely by reduced demand for cars, car parts and industrial equipment. Imports were also down 6.2 percent to $232.2 billion in March.

In other sectors, including tourism and banking, the U.S. ran a $21.2 billion surplus, according to the AP. In the car and appliance sector, however, the country ran a $65.6 billion deficit, according to the AP. Motor vehicles and parts saw their lowest export numbers since November 2011, and consumer goods shipments overall fell to a seven-year low, Reuters reported. Exports of services reached a nearly seven-year low, which was likely related to travel restrictions amid the pandemic.

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The sum of exports and imports also declined 7.8 percent from February to $419.9 billion in March. The number represented an 11.4 percent drop from trade last March.

Imports to China also fell in March amid ongoing political tensions between Beijing and Washington, according to the Commerce Department. While exports rose slightly, overall trade fell 21.3 percent to $15.5 billion in March. The trade war with China has contributed to the import decline, as has a sharp drop in crude oil imports. The U.S. posted an all-time high of $2.1 billion in petroleum surplus in March, according to Reuters.

The 11.6 percent increase marks the biggest rise in the trade deficit since December 2018. It comes as coronavirus-related lockdowns have reduced demand, with the U.S. gross domestic product falling at a 4.8 percent in the first quarter of 2020, the steepest drop since the fourth quarter of 2008.