US trade deficit rose to record highs

US, WASHINGTON (ORDO NEWS) — Restrictions on purchases, dinners in restaurants and cafes, trips amid the COVID-19 pandemic significantly affected US exports. The US trade deficit has reached the largest gap in 11 years.

According to new data from the US Census Bureau and the US Bureau of Economic Analysis, the trade deficit of goods and services in March was $ 44.4 billion – $ 4.6 billion, or 11%, more than in the previous month.

Exports and imports of goods and services declined significantly in February and March this year due to a significant drop in travel and a decline in the tourism sector. Export trade declined by $ 20 billion (10%) to $ 187.7 billion. For comparison, imports fell $ 15.4 billion (more than 6%), reaching $ 232.2 billion.

A significant contribution to the US economy is made by the costs of foreign visitors. Money of tourists and travelers is the main source of foreign currency. This is 11% of total US exports and a third of total US services exports in 2017.

Travel restrictions due to COVID-19 ended with “a rapid reduction in the number of foreign tourists traveling to and from the United States.” This was mentioned by the Bureau of Economic Analysis. Travel and transportation accounted for almost all the downturns in US service trade.

A $ 7.5 billion reduction in tourist exports in March is tantamount to a reduction in industrial supplies, materials, automobiles, parts and engines, as well as other goods combined. The volume of transportation services – large exports, including sea, air, postal, road transport, maintenance and repair – also fell by $ 2.6 billion per month.

Imports of tourism services fell significantly in March by $ 10.7 billion. Another significant reduction in imports was seen in consumer goods, automobile vehicles, parts, and engines.

It is expected that this year the volume of international tourism in the United States will grow by 2% to 80 million people. And almost half of them will be from Canada or Mexico. Nevertheless, according to the US Customs and Border Control Service, trips from Canada and Mexico in March fell by 70% compared to the same period last year.

The number of tourists from 15 large countries, including the UK, Japan, Brazil and Germany, fell by more than 65%. In the first 3 months of 2020, 26% less tourists arrived than in the same period in 2019.

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