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US trade deficit drops 15% in Jan
[WASHINGTON] The US trade deficit dropped nearly 15 per cent in January compared to December, largely due to declining imports from China, the Commerce Department reported Wednesday.
The drop reversed most of the expansion in the trade gap posted in the final month of 2018, a year that saw the deficit surge to a 10-year record, despite President Donald Trump's aggressive tariff policies.
US imports fell 2.6 per cent to US$258.5 billion while exports rose just under 1 per cent to $207.3 billion, for a deficit of US$51.1 billion in the month. The trade gap in December surged nearly 19 per cent to US$59.9 billion.
Analysts had been expecting a much more modest narrowing of the deficit. The January deficit was 3.7 per cent smaller than it was a year earlier.
And the deficit in goods alone with China - the primary foe in Trump's trade wars - fell by US$5.5 billion in the month to US$33.2 billion, according to the report, almost entirely due to declining imports from that country.
In addition to the impact of tariffs on trade with China, the stronger-than-expected decline in the trade deficit could reflect the expected slowdown in the US and global economies.
US goods exports to China fell to just US$7.1 billion, not adjusted for seasonal factors, the lowest since September 2010.
The goods balance with Canada shifted to a surplus of US$1.4 billion, while the deficit with Mexico narrowed more than US$1.5 billion to US$7.2 billion.
But in services, where the US is a dominant force, exports were the highest on record at US$70 billion, according to the report.
The falling price for oil, which hit the lowest point in three years, also helped narrow the trade gap by US$1.4 billion.