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US goods trade deficit with China drops to five-year low
[WASHINGTON] The US goods trade deficit with China, a focus of the Trump administration's "America First" agenda dropped to a five-year low in March amid a surge in exports, including soybeans.
The Commerce Department said on Thursday the politically sensitive goods trade deficit with China decreased 16.2 per cent to US$20.7 billion, the lowest level since March 2014, also as imports from the world's No 2 economy fell 6.1 per cent. Exports to China jumped 23.6 per cent in March.
Washington last year imposed tariffs on US$250 billion worth of goods imported from China, with Beijing retaliating with duties on US$110 billion worth of American products. President Donald Trump said on Sunday he would raise tariffs on US$200 billion worth of Chinese goods from 10 to 25 per cent on Friday.
Reuters, citing US government sources, reported on Wednesday that China had backtracked on almost all aspects of a trade deal between Washington and Beijing.
The overall trade deficit increased 1.5 per cent to US$50.0 billion. Data for February was revised slightly to show the trade gap falling to US$49.3 billion instead of US$49.4 billion as previously reported.
Economists polled by Reuters had forecast the trade shortfall widening to US$50.2 billion in March. The goods trade deficit increased 0.7 per cent to US$72.4 billion in March. The trade data have been volatile in recent months amid big swings between exports and imports because of the United States' conflicts with trading partners, especially China.
When adjusted for inflation, the overall goods trade deficit increased US$0.5 billion to US$82.1 billion in March.
The government reported last month that trade contributed 1.03 percentage points to the economy's 3.2 per cent annualised growth pace in the first quarter.
But relatively weak advance wholesale and retail inventory data for March has led economists to expect the initial GDP growth estimate would be trimmed to just below a 3.0 per cent rate when the government publishes its revision later this month.
In March, goods exports increased 1.4 to US$141.7 billion. There were increases in exports of industrial supplies and materials, and soybeans.
But shipments of civilian aircraft fell US$0.7 billion in March. Commercial aircraft exports are likely to decline further after Boeing suspended deliveries of its troubled 737 MAX aircraft. The MAX planes have been grounded indefinitely following two deadly crashes.
Goods imports rose 1.2 per cent to US$214.1 billion in March. There were increases in imports of crude oil. Food imports were the highest on record. Consumer goods imports, however, fell amid declines in imports of cellphones and other household goods. Imports of industrial supplies and materials increased by US$2.4 billion.