By Greg Robb WASHINGTON (MarketWatch) -- The U.S. trade deficit widened a slight 0.2% in July to $42.0 billion, just marginally above the 18-month low gap set June, the Commerce Department said Tuesday. The July trade deficit was below the consensus forecast of Wall Street economists of a deficit of $43.5 billion for July and below last month's initial reading for June. The government revised the deficit in June down to $41.9 billion from $42.9 billion. Both exports and imports fell in July, with exports falling at a slightly faster pace. The U.S. trade deficit with China widened to a record $29.4 billion in July compared with $27.0 billion in the same month last year. There were signs the European debt crisis was negatively impacting U.S. trade. The U.S. deficit with the European Union in July was the highest since October 2007 as U.S. exports to the region slowed compared with the same month last year while EU exports flowed into the U.S. at a faster pace. U.S. exports to Germany in July were the lowest since February 2010.

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