The United States August trade deficit dropped substantially to its lowest since last January, 57.6 billion US dollars, as export levels rose to a monthly high and imports fell, reported the Department of Commerce.
The value of US exports rose to a record 138.3 billion US dollars last August partly because of the fall in the value of the US dollar which made US manufactured goods more competitive against other major currencies. Imports on the other hand fell 0.4% to 195.9 billion US dollars. The trade deficit for the first eight months of 2007 totaled 708 billion US dollars, down 6.7% compared to the same period a year ago. Even the politically sensitive trade deficit with China narrowed to 22 billion US dollars in August, a 5.3% drop, boosted by larger sales of aircrafts and soybeans The narrowing deficit is good news for President Bush administration which has faced sustained criticism over the country's spiraling trade imbalance in recent years. The narrowing deficit is good news for the Bush administration which has faced sustained criticism over the country's spiraling trade imbalance in recent years. The strength of the export sector also provides a fillip for companies worried about the state of the US economy amid the housing slump and instability in financial markets. Wall Street responded positively to the figures.