US trade deficit widens in August
The Commerce Department today announced the US trade deficit widened in August by 8.8% to $46.6 billion (£29 billion), from $42.58 billion in August.
Economists had expected a $44.5 billion gap.
According to the Commerce Department, the widening in the trade deficit was primarily due to record imports from China.
Imports from China rose 6.1% in August to a record $35.3 billion, while exports to China remained flat at $7.3 billion.
The figures led to a politically sensitive gap with China of $28 billion – the previous record trade deficit with China was $27.9 billion in October 2008 – just as the global financial crisis erupted.
The trade figures come as currency tensions increase between the US and Beijing.
The US continues to pressure China to let the value of the yuan appreciate against other currencies.
The US argues that China is keeping the value of the yuan low to help its exporters at the expense of overseas competitors.
Trade groups have argued that the yuan, also referred to as the renminbi, is kept up to 40% below what its value should be against the US dollar.
Many have already referred to China as a currency manipulator.
The US House of Representatives recently backed a bill which will allow it to impose retaliatory tariffs on China.