U.S. exports and imports of goods both slumped in September to the weakest levels in more than a year, the latest sign President Donald Trump’s tariffs are weighing on the economy.
The steeper decline for imports unexpectedly narrowed the merchandise trade deficit to $70.4 billion from $73.1 billion in August, according to Commerce Department data released Monday that compared with a projected gap of $73.5 billion in Bloomberg’s survey.
Exports declined 3% from a year earlier to $135.9 billion, the lowest in more than a year and a half, while imports were down 4.6% to a nearly two-year low of $206.3 billion.
The figures add to indications that Trump’s trade policies are challenging American companies as rising tariffs aimed at China muddle supply chains and add to uncertainty. Other data have shown that the tensions with China have helped to reduce business investment and slow the pace of hiring.
Shipments of foods, feeds and beverages tumbled 12.6% from the prior month, and exports of vehicles dropped 7.2%. Imports of consumer goods were down 5%.
Trump said minutes after the release of the report that the U.S. is ahead of schedule with finalizing sections of the first phase of a trade deal with China that could be signed soon. “We’re a little bit ahead of schedule, probably a lot ahead,” he said.
Stockpiles Shift
The government’s advance report also showed wholesale inventories dropped 0.3% while retail stockpiles were up 0.3%.
Analysts look to these numbers to adjust estimates for economic growth during the quarter. Before Monday’s report, economists had forecast that the government’s first estimate for third-quarter gross domestic product due Wednesday will slow to a 1.6% annualized pace from 2% in the prior quarter.
Exports and imports of goods account for about three-fourths of America’s total trade; the U.S. typically runs a deficit in merchandise and a surplus in services.
Monday’s figures cover goods only. The Commerce Department will release full September data for international trade Nov. 5, including services and more details on merchandise shipments.
