US trade deficit narrows to smallest in four months

Containers at shipping port The US trade deficit narrowed in August, but the trade gap with China is at a record

The US trade deficit with the rest of the world narrowed in August to the smallest gap in four months, official figures have shown.

The trade gap narrowed to $45.61bn (£29.1bn), from a revised $45.63bn in July, the Commerce Department said.

However, the politically-sensitive trade gap with China widened to a record high.

US imports and exports both slowed in the month as the weakening in the global economy took hold.

For August, exports slipped by $95m to $177.6bn, as sales of expensive industrial items like cars, aircraft engines and oil field equipment all declined.

Imports fell by $111m to $223.2bn.

China gap

With China, which the US has accused of keeping its currency artificially low, imports into the US reached a record $37.4bn.

Between January and July, the US trade deficit with China was running 10% higher than the same point last year - when the trade gap between the two ballooned.

On Tuesday, the US Senate passed a bill that would mandate the imposition of tariffs on some Chinese goods if the US Treasury determines that China is manipulating its currency.

Earlier this week, Congress also approved three free trade agreements - with South Korea, Colombia and Panama.

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