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Goods & Services Deficit Widened by $0.1 Billion in July

06 September 2017

America's trade shortfall with the rest of the world edged up in July as exports slipped a tad more quickly than purchases from overseas.

Coming at the start of the third quarter, the July trade deficit saw its largest swing in three months and could weigh on GDP growth.

Prices were largely responsible for this decrease, as the Canadian dollar gained 3.6 cents USA relative to the U.S. greenback from June to July, said Statistics Canada.

President Donald Trump has made reducing bilateral trade deficits a cornerstone of a his economic agenda, with negotiations now underway to revise the North American and US-Korea Free Trade Agreements.

The U.S. worldwide trade deficit expanded in July, growing 0.3% to $43.7 billion, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis.

Canada posted a Can$3.0 billion (RM10.24 billion) trade deficit in July, as widespread price decreases pushed down both import and export figures, the government statistical agency said today.

The US trade deficit is already about 10 percent higher in the first seven months of 2017, compared with the same period in 2016.

But exports of passenger cars fell by $1 billion while mobile telephones and similar household goods fell $500 million for the month. Imports of services remained virtually unchanged at $44.1 billion in July.

Commenting on the data, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The core goods deficit, ex-oil and aircraft, rose by $2.5bn and stood a bit above the Q2 average".

Among the major trading partners, the U.S. deficit in goods with China widened to its largest point since August of past year, at $33.6 billion, not seasonally adjusted.

Analysts in a Reuters poll had predicted a shortfall of C$3.1 billion.

Bilateral trade with the United States - Canada's largest trading partner - fell, resulting in a wider trade surplus from Can$1.8 billion in June to Can$2.9 billion in July.

Goods & Services Deficit Widened by $0.1 Billion in July