The US trade deficit ballooned in August to its highest level in six months. Trade deficit so far this year has risen 8.6 per cent over the same period in 2017. Businesses rushed to import goods before tariffs hit on China in late August and September, including importing products needed in stores for the holiday shopping season, driving up the trade gap.

Exports of tariff-targeted goods fell while American consumers snapped up imported cars and mobile phones. Retaliatory tariffs imposed by China have continued to whipsaw American farmers. Ironically Republicans who are in power traditionally count on farmers for political support.

The unexpectedly poor trade numbers could slow economic growth in the third quarter. Even adjusting for price changes, it looks like the trade deficit widened significantly in the third quarter, greatly slowing growth. The gap in goods trade with China rose to $38.6 billion for August and with Mexico hit $8.7 billion both the highest monthly totals ever. At $31.1 billion, imports from Mexico also were the highest ever.