(CN) – America’s trade gap with all countries fell 8.2% in November to the lowest level since President Donald Trump took office, while the politically sensitive deficit with China also shrank.
The difference between the goods and services the United States sells and buys from other countries dropped to $43.1 billion, marking the smallest overall trade deficit since October 2016.
The U.S. trade gap is down 0.7% from January through November 2019 and appears on track for the first annual decline since 2013.
Exports to all countries increased by 0.7% to $208.6 billion in November, while overall imports fell 1% to $251.7 billion, according to a Commerce Department report released Tuesday.
While the Trump administration will no doubt point to the report as a sign of success, some experts disagree.
Robert E. Scott, senior economist at the nonprofit think tank Economic Policy Institute, said the numbers show the U.S. economy is slowing – especially in the manufacturing sector.
“Manufacturing is a big consumer of imports, it’s also affected heavily by imports,” Scott said in a phone interview. “The slowdown in the real economy is having a big effect on trade.”
He said people pay too much attention to the stock market and not enough to the rest of the economy.
“A contracting trade deficit is an indication that the economy is slowing down,” Scott said. “It’s in part a reflection of the fact that the rest of the world is slowing and that’s being transmitted to us in the form of reduced exports.”
The closely watched goods deficit with China dropped to $26.4 billion in November, a 15.7% decrease from the month before. Chinese imports to the U.S. fell 9.2% while American exports to China jumped 13.7%.
President Trump has made closing the trade gap with China a top priority under his “America First” policy, saying the deficit is the result of bad deals by past administrations. After 18 months of a trade war, the president is set to sign a first-phase trade agreement with Beijing next week at the White House.
But Scott said that as the gap with China narrows, the trade deficit with other countries is actually rising, especially in Asia.
“China is simply shifting where it’s shipping the goods,” he said. “China has not been hurt. Their overall global exports are up.”
The economist said Trump’s trade strategy is clearly not working.
“The U.S. trade deficit with the world is up in his term,” Scott said. “He said he was going to make American manufacturing great again, he was going to prevent all these factories from leaving. He didn’t succeed.”