The US trade deficit narrowed in March for the first time in seven months as exports reached the highest level on record, the Commerce Department said today.
The drop in the trade gap could point to higher growth in the first quarter than previously expected and comes as President Donald Trump pursues a fraught two-front trade confrontation with the European Union and China.
Rising exports of petroleum and agricultural staples as well as a steep drop in imports sent the monthly US trade deficit plunging to $49 billion, a 15.2% drop from February, the biggest decrease in more than two years.
However, the deficit was still up 18.5% in the first quarter compared to the same period last year, at $25.5 billion.
US exports of goods and services hit $208.5 billion, a new record, driven upwards by mounting exports of crude oil and other fuels as well as civilian aircraft and crops like soybeans, on which China has threatened to impose retaliatory tariffs.
Americans also paid less to foreign companies for the licensing of intellectual property, and bought fewer foreign-made televisions, semiconductors and computers, helping drive US imports down 1.8% for the month to $257.5 billion.
Imports of foreign cars, however, hit a record $31.3 billion.
The goods deficit with China fell 11.5% from February to $25.8 billion.
Imports from Mexico, which is locked in tense trade negotiations with the Trump administration, also hit a record at $30 billion, sending the US deficit with Mexico in goods alone to a record $8.1 billion, up from $6 billion in the previous month.
Exports to Canada, also a partner in the North American Free Trade Agreement, were the highest since October 2014 at $28.4 billion, for a trade surplus of $306m for goods only, compared to a $404m deficit in February.
