(CN) – America’s trade gap with all countries dropped 12.2% in February to the lowest level since fall 2016, while the closely watched deficit with China also shrank as the coronavirus pandemic shut down that country’s economy.
The difference between the goods and services the United States sells and buys from other countries fell to $39.9 billion in the second month of the year, just as the Covid-19 outbreak began taking hold in the U.S. For the most part, the American economy didn’t feel the impact of the virus until March.
Exports to all countries dropped 0.4% to $207.5 billion, but imports dropped off even more, shrinking by 2.5% to $247.5 billion, according to a Commerce Department report released Thursday.
The closely watched goods deficit with China dropped 17% to $19.7 billion, as imports from Beijing fell 13% to $27.2 billion during the outbreak. American exports to China also fell, but at a lower rate, to $7.5 billion.
President Donald 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.
But after nearly two years of trade wars, both countries – and many others around the world – have been ravaged by the Covid-19 pandemic.
With most Americans now under stay-at-home orders, experts say a lower demand for a wide range of goods will result in fewer imports to the U.S.
“The sharp decline in imports point to what is likely to be continued significant cutbacks in U.S. purchases of foreign products,” said Joel Naroff of Naroff Economic Advisors.
John Murphy, senior vice president for international policy at the U.S. Chamber of Commerce, said the lower trade deficit in February is not cause for celebration.
“That always happens in a recession. Happened big time in the Great Depression. It does not mean anything good. It does not represent ‘winning,’” he tweeted.