US international trade deficit for December $-98.4B vs $-96.6 billion

• Prior month $-78.2 billion revised to $-78.9 billion
• US international trade deficit for December $-98.4 billion versus $-96.6 billion estimate. The 2nd largest trade deficit going back to 1992.
• Goods trade balance $-122.01 billion versus $-122.11 billion preliminary. Last month $-103.5 billion
• Exports $266.5 billion, $-7.1 billion or minus -2.6% versus November
• imports $364.9 billion, +$12.4 billion versus November

Details from the BEA

Exports of goods decreased $7.5 billion to $170.2 billion in December.

Exports of goods on a Census basis decreased $6.7 billion.

• Consumer goods decreased $1.8 billion.
  • Pharmaceutical preparations decreased $1.4 billion.
• Industrial supplies and materials decreased $1.8 billion.
  • Crude oil decreased $0.9 billion.
  • Other petroleum products decreased $0.3 billion.
  • Other precious metals decreased $0.3 billion.
  • Fertilizers, pesticides, and insecticides decreased $0.3 billion.
• Capital goods decreased $1.4 billion.
  • Computers decreased $0.9 billion.
  • Civilian aircraft increased $1.4 billion.
• Automotive vehicles, parts, and engines decreased $0.9 billion.
  • Trucks, buses, and special purpose vehicles decreased $0.4 billion.
  • Other automotive parts and accessories decreased $0.3 billion.

Net balance of payments adjustments decreased $0.8 billion.

Exports of services increased $0.4 billion to $96.3 billion in December.

• Travel increased $0.3 billion.
• Financial services increased $0.1 billion.

Imports of goods increased $11.4 billion to $293.1 billion in December.

Imports of goods on a Census basis increased $11.3 billion.

• Industrial supplies and materials increased $10.8 billion.
  • Finished metal shapes increased $9.2 billion.
  • Nonmonetary gold increased $1.0 billion.
• Consumer goods increased $2.2 billion.
  • Toys, games, and sporting goods increased $0.8 billion.
  • Cell phones and other household goods increased $0.8 billion.
• Capital goods increased $1.3 billion.
  • Computers increased $1.2 billion.
  • Computer accessories increased $0.9 billion.
  • Civilian aircraft decreased $1.1 billion.
• Automotive vehicles, parts, and engines decreased $2.2 billion.
  • Passenger cars decreased $1.6 billion.

Net balance of payments adjustments increased $0.1 billion.

Imports of services increased $1.0 billion to $71.8 billion in December.

• Transport increased $0.5 billion.
• Travel increased $0.3 billion.

What were the surpluses/deficits by country:

Surpluses (in billions of dollars):

• Netherlands: $5.0
• South and Central America: $3.5
• United Kingdom: $2.3
• Hong Kong: $0.7
• Brazil: $0.4
• Saudi Arabia: $0.4
• Belgium: $0.3
• Australia: $0.2

Deficits (in billions of dollars):

• China: $25.3
• European Union: $20.4
• Mexico: $15.2
• Switzerland: $13.0
• Vietnam: $11.4
• Canada: $7.9
• Germany: $7.6
• Taiwan: $6.9
• Ireland: $6.2
• South Korea: $5.6
• Japan: $5.5
• India: $4.9
• Italy: $4.1
• Malaysia: $2.5
• France: $1.1
• Israel: $0.8
• Singapore: $0.4

Some highlights:

• The deficit with Switzerland increased $9.1 billion to $13.0 billion in December. Exports decreased $0.7 billion to $1.2 billion and imports increased $8.4 billion to $14.2 billion. That is a big change.
• The deficit with Canada increased $2.9 billion to $7.9 billion in December. Exports decreased $0.4 billion to $29.1 billion and imports increased $2.5 billion to $37.0 billion. That makes sense given all the barkng about Canada.
• The deficit with Ireland decreased $3.1 billion to $6.2 billion in December. Exports decreased $0.1 billion to $1.2 billion and imports decreased $3.2 billion to $7.5 billion

The data points to the import of goods ahead of tariffs. Most of the increase in imports was in industrial supplies and materials which increased by $10.8 billion. The larger trade deficit also plays into the hands of Trump raising tariffs. The higher the deficit the louder he can be about bringing manufacturing back to the US.

This article was written by Greg Michalowski at www.forexlive.com.