U.S. trade gap widened in March. Is this good news?

Posted May 12th 2009 3:50PM by Connie Madon
Filed under: International Markets, China, Mexico, Economic Data, Financial Crisis

Bad news is good news. How can that be you say? When our trade deficit goes up it means that we are importing more that we are exporting. So why is this good? Well, for one thing it means that international trade is picking up.and that's a good thing. The March trade deficit grew by nearly 6% to $27 billion. The US trade deficit has plunged 52% from a year ago. The fact that imports and exports are falling at a slower rate brings a note optimism to world trade.

US exports fell by 2.4% to $123.6 billion and imports fell only 1% to $151.2 billion.Trade flows have narrowed in recent months with purchase of industrial supplies, capital goods and oil prices showing declines.

Our trade with China grew in March, from $14.2 billion to $15.6 billion. The US deficit with the European Union widened from $3.3 billion to $4 billion. The gap with Mexico also widened from $3.1 billion to $3.9 billion.

From the Chinese perspective, official there bemoaning the steep decline in the demand for Chinese goods, raising fears that the worst is not over.

In a separate report the International Monetary Fund said that world output would contract by 1.3% this year.

Do you believe that international trade will begin the grow this year?

Tags: inthenews, US trade gap widens, UsTradeGapWidens