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May 30, 2019 1:15 PM, EDT

Goods-Trade Gap Widens Second Month to Highest This Year

Trade Luke Sharrett/Bloomberg News

The U.S. merchandise-trade deficit widened for a second month to the highest level since a record in December as exports dipped.

The goods-trade gap grew to $72.1 billion in April from $71.9 billion the month earlier, according to Commerce Department figures May 30, slightly undershooting economist estimates for an increase in the deficit to $72.7 billion.

The figures precede this month’s escalation of the U.S.-China trade as President Donald Trump increased tariffs on goods from the Asian nation. The U.S. is also threatening to add levies on most remaining imports from China. In prior rounds of tariffs, companies had front-loaded purchases and bulked up inventories, which helped buoy growth in prior quarters but may drag on the economy later in the year.

The widening trade gap is the latest indication that Trump’s tariff war with China is weighing on business decisions. Foreign purchasers also may be balking at U.S. exports due to the strong dollar, while Chinese buyers could be continuing to pare shipments from America.

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Separate government data May 30 showed net exports and inventory accumulation added a combined 1.56 percentage point to the pace of gross domestic product growth in the first quarter, revised from a 1.68 percentage point-gain in the initial GDP report released last month.

The 4.2% monthly decline in exports reflected broad-based drops across industrial supplies, capital goods, vehicles and consumer goods. A 2.7% decrease in imports was led by capital goods, vehicles and industrial supplies.