US trade deficit narrows slightly amid escalating trade tensions

The overall US trade deficit narrowed slightly in June as both imports and exports declined amid escalating trade tensions, US government figures showed on Friday.

The US goods and services deficit was US$55.2 billion in June, down from the revised US$55.3 billion in May but higher than economists' expectation for US$54.6 billion, according to the US Commerce Department.

US exports in June fell to US$206.3 billion, US$4.4 billion less than in May, while imports dropped to US$261.5 billion, down US$4.6 billion from the previous month, suggesting that trade tensions were curtailing trade flows.

While the Trump administration has tried to shrink the trade gap by imposing tariffs on various imports, the US goods and services deficit increased US$23.2 billion, or 7.9 percent, from a year earlier.

Economists at the International Monetary Fund said earlier that America's persistent deficit with its trading partners resulted from its macroeconomic policy, urging it to adopt fiscal consolidation and implement structural policies to address external imbalances, instead of resorting to distorted trade actions.