US trade gap tops $68 billion, widest in almost a year

The U.S. trade deficit widened to $68.9 billion in February, the widest gap since April last year, as imports exceeded exports by more than analysts expected.

The trade gap in goods widened by $300 million to $91.4 billion, while the services export surplus fell by $1.6 billion to $22.5 billion, according to data released Thursday by the Commerce Department.

Total imports amounted to $331.9 billion and exports amounted to $263 billion, with the overall deficit widening by 1.9% from the same month.

The trade gap has hovered around $40 billion for the past decade, but will exceed $100 billion in 2022 in the aftermath of the pandemic. It was on the verge of normalization, but may have reached an inflection point last August when it started to rise again.

Supply chain distortions and the new direction of U.S. trade policy have sparked debate across the industry, but analysts say supply disruptions are largely resolved.

“Despite the headlines, there is not much evidence that the shock has significantly disrupted trade patterns,” UBS economist Paul Donovan said in a commentary Thursday.

federal reserve Global Supply Chain Pressure Index is currently near zero, indicating little stress on trade flows.

Trade frustration is growing among Republican lawmakers, who say the U.S. agricultural trade strategy is not “ambitious” and express dissatisfaction with the efforts of U.S. Trade Representative Katherine Tai.

“We expect trade to fluctuate in response to macroeconomic factors and market conditions,” Republican senators wrote in a letter to Tai in March. “However, the current precipitous decline in U.S. agricultural exports directly undermines an ambitious U.S. trade strategy that has failed to meaningfully expand market access or reduce tariff and non-tariff barriers to trade. and it is getting worse.”

Domestic exports of food, feed and beverages have fallen by $729 million since the beginning of the year, according to February trade statistics. Soybean exports decreased by $1.9 billion, wheat by $429 million and dairy products by $97 million.