US trade gap shrinks on export boost as imports stay elevated
The gap in goods and services trade narrowed 6.1% from the prior month to US$122.7 billion
[NEW YORK] The US trade deficit shrank in February from a record at the start of the year as stronger exports blunted the impact of a rush to secure goods and materials before the Trump administration’s sweeping tariffs.
The gap in goods and services trade narrowed 6.1 per cent from the prior month to US$122.7 billion, Commerce Department data showed on Thursday (Apr 3). The median estimate in a Bloomberg survey of economists called for a US$123.5 billion shortfall.
The value of exports rose 2.9 per cent, while imports remained near a record. The figures aren’t adjusted for inflation.
The report comes as the world is still processing President Donald Trump’s rollout of reciprocal tariffs on Wednesday, which assigns a baseline rate of 10 per cent globally. But several countries, like China and Vietnam, will be hit with levies much higher than that.
Imports may very well fall in the coming months – which would help to narrow the trade gap, one of Trump’s aims with his policy – as businesses try to avoid outsourcing expensive foreign goods.
Trump is employing tariffs to ensure fairness in bilateral commerce, encourage foreign investment and expand production in the US, and shore up national industrial security. He also sees duties as a means to raise revenue for the government.
Last month, Trump handed down 25 per cent duties on certain goods from Canada and Mexico, imposed a global duty on aluminium and steel, and doubled tariffs on Chinese goods to 20 per cent. The president also followed through on a threat to implement a 25 per cent tariff on auto imports that just took effect. BLOOMBERG
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