The U.S. trade deficit widened in July with imports outpacing exports as Americans buy foreign-made goods in increasing numbers.
In comparison to August, the foreign-trade gap expanded 19% to a seasonally adjusted $63.56 billion for July according to a recent statement by the Department of Commerce.
A monthly trade deficit of this size has not been seen since July 2008 when the Great Recession of 2007-2009 rocked the U.S. and global markets.
COVID-19 has largely shut down the U.S. economy since March when lockdown restrictions were put in place. Furthermore, the global nature of the pandemic has massively affected supply chains and trade.
As lockdown restrictions continue to be lifted and businesses begin resuming operations, domestic spending on foreign-made vehicles, consumer products, and capital goods has markedly increased.
While imports are on an upward trend, exports are struggling to reach pre-pandemic levels. “The import side pretty much has bounced back, but the export side has not,” said Joshua Shapiro, chief economist at MFR Inc.
