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U.S. trade deficit shrinks as global economy gathers strength

The U.S. trade deficit dropped sharply in February compared with the previous month, data released on Tuesday showed, as a stronger global economy helped to stoke demand for American-made goods.

The trade deficit, the gap between U.S. imports and exports of goods and services, fell to $43.6 billion in February, down from $48.2 billion in January. The drop exceeded economists’ expectations by more than $1 billion.

U.S. goods exports to the rest of the world rose as shoppers in other countries purchased consumer goods, cars and other American-made products.

The Trump administration has said that shrinking the trade deficit is one of their primary goals. But Chris Rupkey, chief financial economist at MUFG Union Bank, said in a note Tuesday morning that the positive February numbers had nothing to do with the new administration, as “trade orders’ shipping decisions both in and out were made months ago.”

President Donald Trump issued two executive orders on trade last week, one ordering the government to prepare a report on the bilateral trade deficits the United States maintains with other countries, and another ordering tougher enforcement of existing measures against dumping and other unfair trade practices.

The U.S. trade deficit is likely to be an issues when Trump meets with Chinese President Xi Jinping on Thursday in Florida.

Trump has blasted Chinese leaders about the U.S. trade deficit with China and the unfair trade policies he says contribute to it. He has said he would press China on ways to narrow the trade gap, but he also has a host of other issues to bring up at the meetin, including the nuclear threat from North Korea.

Economists, however, say that altering a long-standing pattern of trade between the United States and China will be difficult.

 

apbalboa

 

apbalboa

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