US trade deficit soars in August to highest in 14 years

By Ovunc Kutlu

ANKARA (AA) - The US saw its trade deficit increase 5.9% to $67.1 billion in August to reach its highest level since August 2006, according to the Commerce Department on Tuesday.

Analysts expected the figure to come in at $66.1 billion in August. Its July level was revised down from $63.6 billion to $63.4 billion.

While exports of goods and services were worth $171.9 billion -- $3.6 billion more than July exports -- imports rose faster to $239 billion, $7.4 billion more than in July.

On a positive note, the deficit with China decreased $1.9 billion to $26.4 billion with exports increasing $1.7 billion to $11.2 billion and imports decreasing $0.2 billion to $37.7 billion month-over-month.

The US, however, saw its trade deficit with Germany and Japan increase $1.6 billion and $1 billion, respectively, from the previous month.

Although US President Donald Trump promised to lower the trade deficit, especially with China, the American economy is still struggling to recover because of the coronavirus pandemic and many analysts say it is in need of another fiscal stimulus.

US Treasury Secretary Steven Mnuchin and House of Representatives Speaker Nancy Pelosi spoke via telephone Monday about a $2.2 trillion relief bill that was passed by House Democrats last week. The two are set to talk again Tuesday.

Federal Reserve Chair Jerome Powell, who will deliver a speech later Tuesday, has repeatedly indicated in recent weeks that the central bank's monetary policies and quantitative easing should be supported by Congress and the administration through another fiscal package.

As investors remain hopeful that talks on a new relief bill would be constructive, and Trump returned from the hospital after contracting COVID-19, the three major US stock market indexes opened the day in positive territory or flat.

The Dow Jones was up 65 points, or 0.2% to 28,214 points, while the S&P 500 was 3 points higher, or 0.1%, to 3,412 at the opening bell.

The Nasdaq was down five points, less than 0.1%, at 11,326 points.