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Exports of American goods and services suffered their worst decline on record last month, according to the latest data from the US Commerce Department.
While debate still rages as to the veracity of Chinese statistics, the United States is currently the nation worst-affected by the novel coronavirus outbreak, with more than 1.2 million confirmed cases and almost 70,000 deaths.
Business activity and manufacturing in the world’s largest economy ground to a halt in March as a result of government-imposed shutdown orders, while non-domestic markets similarly locked down.
Consequently, US exports fell by a record 9.6 per cent on the previous month to $187.7bn (£151bn, €173bn). Imports declined by the most in more than a decade, falling 6.2 per cent to $232.2bn.
2020 was meant to be the year of increased global trade, with investors and politicians alike welcoming the partial resolution of the US-China trade war as a timely deterrent against any global economic slowdown. Instead the global economy is braced for a recession worse than the Global Financial Crisis.
The shuttering of international travel and tourism accounted for a significant part of the declines in both exports and imports, representing almost the entire drop in all services trade. Travel exports fell by 45 per cent on the month before, while imports plunged 64 per cent.
The value of US merchandise exports sank to $128.1bn, its lowest level since May 2017. Goods imports also slumped to three-year lows, falling to $193.7bn.
Only last month the US trade deficit shrank to $39.8bn, its smallest since September 2016. In a month this widened to $44.4bn.
The Covid-19 crisis has intensified the rhetoric between China and the United States. When questioned about the US’s future relationship with the second-largest economy in the world, Keith Krach, the undersecretary for Economic Growth, Energy and the Environment at the US State Department, stated: “We’ve been working on [reducing the reliance of our supply chains in China] over the last few years but we are now turbo-charging that initiative. I think it is essential to understand where the critical areas are and where critical bottlenecks exist.”
