U.S. goods trade volumes fall sharply in March, goods deficit widens

U.S. goods trade volumes fell sharply in the month of March as attempts to ease the COVID-19 outbreak negatively impacted goods imports and exports. The advance estimates of U.S. trade in goods showed that the goods deficit widened to USD 64.2 billion in March from February’s deficit of USD 59.9 billion. The widening reverses nearly all of the narrowing that was recorded in February.

Underneath the headline was a sharp fall in trade volumes, which is possibly related to the COVID-19 outbreak and mitigation attempts taken by nations throughout the globe. Inbound and outbound container traffic to and from US ports dropped sharply and was reflected in trade in both goods exports and imports. On a sequential basis, exports fell 6.5 percent, while it dropped 9.8 percent year-on-year. Imports dropped 2.3 percent sequentially and 9.4 percent year-on-year. Goods trade volumes seem to have peaked in mid-2018.

“In our view, trade volumes in early 2018 were likely supported by US fiscal stimulus and front-loading of trade ahead of tariffs. Thereafter, rising trade tensions, concerns about global growth, and, more recently, the COVID-19 outbreak, have all taken their toll on US trade volumes”, said Barclays in a research report.

The USD 8.9 billion fall in goods exports in March was widespread, with exports of industrial supplies dropping 7.4 percent sequentially, capital goods falling 4.3 percent, and automotive exports falling 17.2 percent. Consumer goods exports dropped 5 percent sequentially. Softness in goods imports was more concentrated, with automotive vehicle imports falling 9 percent sequentially and consumer goods imports dropping 8.4 percent. On the contrary, imports of industrial supplies rose 0.8 percent.