Eurozone trade surplus narrows in May

The euro zone’s surplus in its trade in goods with the rest of the world narrowed in May for the third straight month, a fresh sign that the economy hasn’t rebounded strongly from a surprisingly weak start to the year.

Figures released Monday by the European Union’s statistics agency also show the 28-member bloc’s surplus in its trade with the U.S. continued to widen compared with last year, as U.S. President Donald Trump imposed fresh tariffs on the EU’s steel and aluminum exports. The EU responded by imposing tariffs of its own on U.S. exports of goods including bourbon whiskey and Harley-Davidson motorcycles.

Eurostat said that, adjusted to account for regular seasonal variations, the eurozone’s trade surplus with the rest of the world fell to EUR16.9 billion in May from EUR18.0 billion in April as imports rose more rapidly than exports. During the first five months of the year, only February recorded a widening of the surplus, and a modest one at that.

Without the seasonal adjustment, the surplus was EUR16.5 billion, down from EUR19.3 billion in May 2017.

A surge in exports helped drive an acceleration of economic growth during the second half of last year, as the eurozone economy recorded its strongest expansion in a decade. But that export engine has faltered in 2018, contributing to the first-quarter slowdown. The slide in April and May suggests growth hasn’t rebounded significantly in the second quarter. Official figures for growth in that more recent period will be released on Aug. 2.

For the broader EU, the trade surplus with the U.S. widened to EUR54.8 billion in the first five months of this year from EUR48.1 billion in the same period last year. The figures suggest the EU is on course for another year of increased trade surpluses with the U.S. That trend has fueled tensions with the U.S. administration, which regards a persistent deficit with a trading partner as a sign that the rules governing that relationship are unfair.

The figures don’t reflect the trade in services between the U.S. and the EU, which over recent years have been broadly balanced.

Write to Paul Hannon at [email protected]

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