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Steel and iron trade deficit narrowed in June

Keywords: Tags  balance of trade, iron and steel, copper, aluminum, China, U.S. Bureau of Economic Analysis, IHS Global Insight, Alliance for American Manufacturing Gregory Daco

CHICAGO — The U.S. trade deficit on iron and steel mill products fell 5.7 percent to $659 million in June compared with May’s $699 million, as a $22-million drop in exports was more than offset by a $62-million drop in imports.

Meanwhile, the year-to-date trade deficit for iron and steel mill products rose 19.6 percent to just below $4.7 billion, the U.S. Bureau of Economic Analysis reported Thursday.

Copper posted a trade surplus of $227 million in June, down 28.8 percent from May’s surplus of $319 million. The United States has a year-to-date copper trading surplus of $1.9 billion, which is more than three times the $610 million surplus recorded during the first half of 2011.

Imports of bauxite and aluminum fell 6.7 percent in June, largely reversing a 6.1-percent increase in May, while exports of aluminum and alumina fell 1.8 percent in the same period.

For all goods and services, U.S. exports totaled $185 billion in June, while imports totaled $227.9 billion, resulting in a goods-and-services deficit of $42.9 billion, the data show. That is a 10.6-percent change from the $48-billion total trade deficit seen in May. The trade deficit with China grew 5.2 percent month over month.

"A sharp 8.1-percent drop in oil prices reduced the oil import bill and provided half of the total imports losses," Gregory Daco, principal U.S. economist for Lexington, Mass.-based consultancy IHS Global Insight, said Thursday. "Capital and consumer goods imports provided for the rest."

He called exports "surprisingly resilient" in June, as all major categories except food and beverages contributed to the gains. However, he also suggested there is an "ongoing slowdown of foreign demand for U.S. products."

"The good news is that our overall trade deficit fell in June—that helps our economic growth," said Scott Paul, founding executive director of the Washington-based Alliance for American Manufacturing, which represents metals producers and labor organizations. "The bad news is that our trade deficit with China continues to climb. Slower growth in China has hurt our exports."

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