The U.S. trade deficit narrowed sharply in March as exports increased to a record high amid a surge in deliveries of commercial aircraft and soybeans, bolstering the economy’s outlook heading into the second quarter.
Lucia Mutikani of Reuters had the news:
The Commerce Department said the trade deficit tumbled 15.2 percent to a six-month low of $49.0 billion in March. The trade gap widened to $57.7 billion in February, which was the highest level since October 2008.
March’s decline ended six straight monthly increases in the trade deficit. The politically sensitive goods trade gap with China dropped 11.6 percent to $25.9 billion, which will probably do little to ease tensions between the United States and China.
U.S. President Donald Trump has threatened tariffs on up to $150 billion worth of Chinese goods to punish Beijing over its joint-venture requirements and other policies Washington says force American companies to surrender their intellectual property to state-backed Chinese competitors.
China, which denies it coerces such technology transfers, has threatened retaliation in equal measure, including tariffs on U.S. soybeans and aircraft. A U.S. trade delegation arrived in China on Thursday for trade talks.
Paul Wiseman of the Associated Press reported that exports set a record:
Exports rose in March to a record $208.5 billion, led by shipments of civilian aircraft and soybeans. Imports slipped 1.8 percent to $257.5 billion.
The United States ran a $20.5 billion surplus in the trade of services such as education and banking. But that was offset by a $69.5 billion deficit in the trade of goods.
Top administration officials are visiting Beijing this week for talks aimed at reducing America’s huge trade deficit in goods with China, which fell 11.6 percent in March to $25.9 billion. Trump is threatening to slap tariffs on up to $150 billion in Chinese products, and the Chinese have targeted $50 billion in U.S. products, including soybeans and small aircraft.The administration is also seeking to renegotiate the North American Free Trade Agreement with Mexico and Canada, and has slapped tariffs on imported steel and aluminum.
Despite the reduction in March, the trade gap is up 18.5 percent to $163.4 billion so far this year.
Theophilos Argitis of Bloomberg News reported that Canada posted its largest trade deficit ever:
The merchandise trade deficit widened to C$4.14 billion from C$2.93 billion a month earlier, Statistics Canada reported Thursday in Ottawa. Economists predicted the March figure would narrow to C$2.25 billion.
The figures represent a mixed picture for the trade sector. Policy makers will be reassured by a rise in exports and signs of dissipating railway bottlenecks, while the jump in imports implies trade acted as a major drag on first-quarter growth.Imports rose 6 percent to a record C$51.7 billion in March, while exports jumped 3.7 percent to C$47.6 billion. In volume terms, imports rose 5.3 percent, which was the biggest increase since 2009. Exports were up 3 percent, the biggest one month gain since July 2016.
Purchases of cars and consumer goods were responsible for the jump in imports. The auto sector recorded an 8.3 percent jump in imports, the strongest since 2011. Consumer goods imports jumped 7.7 percent to a record high.
