The U.S. trade deficit fell in July, as imports declined slightly and exports rose to the highest level in 10 months.
The deficit declined to $39.5 billion, 11.6 percent lower than June’s $44.7 billion deficit, the Commerce Department reported Friday. Imports dropped 0.8 percent to $225.8 billion, reflecting in part lower oil imports. Exports climbed 1.9 percent to $186.3 billion, the highest level since last September, led by increased sales of American farm products.
The politically sensitive deficit with China increased 1.9 percent to $30.3 billion, the highest level since November.
The trade deficit is the difference between what America exports for sale abroad and imports for consumption in the United States. The deficit last year rose 2.1 percent to $500.4 billion.
The rise in the deficit with China in July reflected higher imports of Chinese-made toys, clothing and cellphones.
President Barack Obama is traveling to China for a weekend summit of the Group of 20 major economic powers. Administration officials say Obama will press the other countries to do more to support global growth.
Even with the July increase, exports through the first seven months of this year are running 3.4 percent lower than the same period in 2015. American exporters have been struggling with a stronger dollar – which makes U.S. goods more expensive on overseas markets – and global economic weakness. But economists believe the drag from the dollar’s rise may be lessening.
Trump, seeking to tap into the economic anxiety of Americans who have seen jobs disappear in an increasingly global economy, has accused the Obama administration of failing to protect U.S. workers from unfair trade practices in China and other countries.
Trump has said he would exit from the North American Free Trade Agreement with Canada and Mexico if it is not improved and will kill the pending Trans-Pacific Partnership trade agreement between America and 11 Pacific Rim nations.
Both Trump and Democratic nominee Hillary Clinton have attacked the TPP agreement, which the Obama administration negotiated and the president still hopes to get through Congress in a lame-duck session after the November election.
While oil prices plunged at the beginning of the year, they have been rebounding more recently. The average price of a barrel of imported oil rose to $41.02 in July, its fifth consecutive monthly increase. However, even with the price gain, total oil imports dropped by 5 percent to $12.6 billion in July.
America’s deficit with the European Union fell 4.4 percent to $12.3 billion, while the deficit with Mexico was down 11.7 percent to $4.7 billion.