U.S. trade deficit soars 12% in March as coronavirus slams exporters and tourism

MarketWatch ^ | May 5, 2020 | Jeffrey Bartash

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The U.S. trade deficit widened by almost 12% in March as the coronavirus pandemic grounded international flights, froze the global tourism industry and caused massive disruptions in the exchange of goods such as new cars and iPhones.

Imports fell 6.2%, but U.S. exports tumbled an even deeper 9.6% to cause the trade gap to rise. It’s the biggest monthly decline in exports ever recorded.

The U.S. deficit rose to $44.4 billion in March from $39.8 billion in February, the government said Tuesday. Economists polled by MarketWatch had forecast a $44.2 billion shortfall.

Exports fell to $187.7 billion in March from $207.7 billion in February.

The U.S. exported fewer cars, aircraft parts and barrels of petroleum in March.

Notably, exports of services such as banking and tourism sank nearly $11 billion to $59.6 billion. Normally services rarely change much month to month, but the plunge in March shows just how much damage has been caused by the coronavirus. Service exports are likely to suffer even worse in April.

Imports dropped to $232.2 billion from $247.6 billion in March. The U.S. imported fewer cellphones, consumer electronics and autos. Shipments of cars and trucks were the lowest since 2011 and are expected to continue to weaken considerably more.

Service imports—largely American tourists and businesspeople flying to and visiting other countries—also saw an unusually large decline.

The deficit in goods with China tumbled to $15.5 billion from $19.7 billion, marking the lowest level since the 2007-09 Great Recession. So far this year the trade gap with China is 35% lower compared with a year ago.

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The things a virus can do.