Trade Deficit Ticks Up Despite Shrinking Gap With China

(CN) – The overall U.S. trade gap grew by 1.5% in March, even though the closely watched deficit with China dropped to a five-year low.  

The difference between the number of goods and services the United States sells and buys from other countries increased to $50 billion, compared to $49.3 billion in February. Economists had predicted a trade deficit of about $50.2 billion.

The goods deficit with China dropped to $20.7 billion, a 16.2% decrease from the month before that marks the lowest level since March 2014.

American imports from China fell 6.1% while exports to that country spiked 23.6%, according to a Commerce Department report released Thursday.

President Donald Trump has made closing the trade gap with China a top priority, saying the deficit is the result of bad deals by past administrations. 

The year-long trade war with Beijing shows no sign of stopping, as the Trump administration is set to raise tariffs on $200 billion in Chinese products from 10% to 25% on Friday. Negotiators from both countries are still trying to iron out the dispute.

Exports to all countries increased by 1% to $212 billion in March, while overall imports nudged up 1.1%to $262 billion.

While the overall deficit widened in March, it is still below the 10-year high of $59.9 billion in December.

In other economic news, the Labor Department reported Thursday that U.S. wholesale prices edged up 0.2% in April on rising energy costs.

The producer price index, which measures costs before goods reach consumers, increased 2.2% compared with a year earlier, matching 12-month gain seen in March.

Not counting the always volatile food and energy categories, core wholesale prices rose 0.4% last month. 

With low inflation pressure, Federal Reserve Chairman Jerome Powell has said the central bank can be “patient” with raising interest rates this year.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit