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Growing US exports shrink trade deficit

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WASHINGTON: A bump in US exports helped shrink America's yawning trade deficit in July while imports from China continued to fall amid the two nations' trade war, government data showed yesterday.

The relatively steady deficit comes as hopes for a near-term resolution to the US-China conflict slide out of view.

The US trade gap narrowed by 2.7 per cent to US$54 billion (S$75 billion), the largest drop in five months, as the US exported more autos, medications, aircraft and oil drilling equipment, the US Commerce Department said.

The July dip could support gross domestic product growth at the start of the third quarter. However, economists had been expecting a bigger decline.

Imports from China, the prime target of US President Donald Trump's trade offensive launched last year, fell 1.9 per cent to US$39 billion, their lowest level since April.

Mexico and the European Union appear to have picked up some of the slack, as the US deficit with both markets continues to rise.

Mr Trump this week has fired off stern warnings to Beijing and has planned successive waves of tariff increases through the end of the year.

The deficit - the difference between what the US exports and imports - has widened so far this year by more than 8 per cent. Mr Trump has viewed deficits as a defeat for the US, claiming they amount to stealing, assertions generally rejected by most economists.

And despite his efforts to cut the deficit, it has continued to rise during his presidency as a growing economy, hungry for goods and services, steadily increased imports.

Weak commodities prices hit US exports for the month, as the value of crude oil, coal, fuel oil and other petroleum products fell. - AFP