US trade gap widened slightly in July as exports fell

Workers build a GM crossover SUV as it goes through the assembly line at the General Motors The US trade gap with China hit a record $29.4bn in July

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The US trade deficit grew slightly in July as exports fell at a faster pace than imports.

The Commerce Department said the trade deficit widened to $42bn (£26bn), 0.2% more than June's gap of $41.9bn.

However, the deficit was still lower than many analysts' forecasts of about $44bn.

US exports fell 1% to $183.3bn, lowered by weaker sales to eurozone nations. Imports fell 0.8% to $225.3bn, with oil imports falling 6.5%.

But imports from China hit a record $37.9bn in July, pushing the trade gap with the country to a record $29.4bn.

The imbalance with Europe rose to the highest level since October 2007. Exports to Europe fell 11.7% as recessions in the region cut into demand.

Exports to Germany were the lowest since February 2010 and the deficit with the European Union was the widest since October 2007.

The US is also exporting less to big emerging economies. For example, sales of goods to Brazil fell 4.4%. Exports to India dropped more than 1%.

The exports of vehicles, telecoms equipment and heavy machinery were all lower.

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