U.S. Trade Deficit Grows in July as Businesses Stock Up on Imports
U.S. trade deficit grew in July as businesses bought more imports ahead of new tariffs, raising concerns about future economic growth
The U.S. trade deficit increased in July as companies bought more imports in anticipation of upcoming tariffs, which could affect economic growth for the rest of the year.
According to the Commerce Department, the trade deficit – the gap between what the U.S. imports and exports – rose by 7.9% to $78.8 billion in July. This was slightly less than the $79.0 billion that some economists had expected, but it was still a rise from $73.1 billion in June.
The Biden administration has announced plans to impose higher tariffs, or taxes, on certain products imported from China, such as electric vehicles, batteries, and solar equipment. The final decision on these tariffs is expected soon. Some analysts are also concerned that tariffs could increase further if former President Donald Trump wins the next election.
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Trade has been a drag on U.S. economic growth for two consecutive quarters, mainly because of more imports. However, with domestic demand slowing, much of the imported goods could end up in storage, which might reduce some of the impact on the country's overall economic growth.
Experts are currently predicting that the U.S. economy could grow at an annual rate of up to 2.7% in the third quarter, following a growth rate of 3.0% in the second quarter.
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