WASHINGTON (Reuters) – The U.S. 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 percent to $20.7 billion, the lowest level since March 2014, also as imports from the world’s No. 2 economy fell 6.1 percent. Exports to China jumped 23.6 percent in March.
Washington last year imposed tariffs on $250 billion worth of goods imported from China, with Beijing retaliating with duties on $110 billion worth of American products. President Donald Trump said on Sunday he would raise tariffs on $200 billion worth of Chinese goods from 10 to 25 percent on Friday.
Reuters, citing U.S. 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 percent to $50.0 billion. Data for February was revised slightly to show the trade gap falling to $49.3 billion instead of $49.4 billion as previously reported.
Economists polled by Reuters had forecast the trade shortfall widening to $50.2 billion in March. The goods trade deficit increased 0.7 percent to $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 $0.5 billion to $82.1 billion in March.
The government reported last month that trade contributed 1.03 percentage points to the economy’s 3.2 percent annualized 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 percent rate when the government publishes its revision later this month.
In March, goods exports increased 1.4 to $141.7 billion. There were increases in exports of industrial supplies and materials, and soybeans.
But shipments of civilian aircraft fell $0.7 billion in March. Commercial aircraft exports are likely to decline further after Boeing (NYSE:) suspended deliveries of its troubled 737 MAX aircraft. The MAX planes have been grounded indefinitely following two deadly crashes.
Goods imports rose 1.2 percent to $214.1 billion in March. There were increases in imports of . 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 $2.4 billion.