(CN) - The U.S. trade deficit, the difference between the nation's imports and exports, declined sharply in February as imports from China fell by a record amount and American exports rose for a third straight month.
The Commerce Department said Tuesday that the trade deficit fell to $43.6 billion in February, 9.6 percent below January's deficit of $48.2 billion.
Imports dropped 1.8 percent to $236.4 billion as the flow of Chinese goods fell by $8.6 billion. Exports rose a miniscule 0.2 percent to $192.9 billion.
As President Donald Trump prepares for his first meeting with President Xi Jinping later this week, the Commerce Department reports the trade deficit with China narrowed in February to $23 billion, 26.6 percent below the January total.
The government attributed the development to a marked drop in the number of cellphones imported from China into the U.S., and to a rise in exports of U.S.-made autos and autos parts, which climbed 1.5 percent to the highest level since July 2014.
Exports of petroleum products were up 8.6 percent
In a tweet last week, Trump said that his meeting at Mar-a-Lago with the Chinese leader would be "a very difficult one in that we can no longer have massive trade deficits and job losses."
Another hot-button issue for the president is NAFTA, which he has vowed to retool.
The Commerce Department said Tuesday that deficit with NAFTA-signatory Mexico surged in February, rising 46 percent to $5.8 billion, which the deficit with Canada, the other NAFTA partner, declined 38.1 percent to $2.1 billion.
The deficit with the European Union declined 18.6 percent to $9.4 billion, led by a 9.2 percent drop in the deficit with Germany.
A larger deficit reduces overall economic growth because it means the country is buying more products from foreign producers rather than domestic companies.