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US trade deficit drops as exports hit record high
[WASHINGTON] The US trade deficit narrowed sharply in March as exports increased to a record high amid a surge in deliveries of commercial aircraft and soybeans.
The Commerce Department said on Thursday the trade gap dropped 15.2 per cent to US$49 billion, the lowest level since September. Data for February was revised slightly to show the trade gap widening to US$57.7 billion, which was the highest level since October 2008, instead of the previously reported US$57.6 billion.
March's decline ended six straight monthly increases in the trade deficit. Economists polled by Reuters had forecast the trade gap narrowing to US$50 billion in March.
The politically sensitive goods trade deficit with China dropped 11.6 per cent to US$25.9 billion, which will probably do little to ease tensions between the United States and China.
US President Donald Trump has threatened tariffs on up to US$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 US soybeans and aircraft.
Mr Trump, who claims the United States is being taken advantage of by its trading partners, has already imposed broad tariffs on imported solar panels and large washing machines. He recently slapped 25 per cent import duties on steel and 10 per cent on aluminum.
The deficit with Mexico vaulted 32.8 per cent to a record US$8.1 billion in March. The US had a US$0.3 billion surplus with Canada in March.
When adjusted for inflation, the trade deficit dropped to US$62.1 billion from US$69.0 billion in February. The government reported last week that trade contributed 0.20 percentage point to the first quarter's 2.3 per cent annualized growth pace.
In March, exports of goods and services increased 2.0 per cent to an all-time high of US$208.5 billion, lifted by a US$1.9 billion increase in shipments of commercial aircraft. There were also increases in exports of soybeans, corn and crude oil. Real goods exports were the highest on record.
Exports to China jumped 26.3 per cent in March.
Imports of goods and services fell 1.8 per cent to US$257.5 billion, in part as the boost from royalties and broadcast license fees related to the Winter Olympics faded. Imports of capital goods fell by US$1.5 billion, weighed down by declines in imports of computer accessories, telecommunications equipment and semiconductors.
Imports of consumer goods decreased by US$0.9 billion. Crude oil imports dropped by US$0.5 billion in March. Imports from China fell 2.1 per cent in March.