US Trade Deficit Shrinks as Exports Rebound

In this Jan. 7, 2019 file photo, a Chinese ship carrying giant cranes approaches the pier at Virginia International Gateway Terminal in Portsmouth, Va. (AP Photo/Steve Helber, File)

(CN) – The U.S. trade deficit fell about 15 percent in January because of a drop in imports and a general increase in exports, although shipments of American products to China reached the lowest level in eight years amid an ongoing trade war.

The gap between the number of goods the United States sells and buys from other countries fell 14.6 percent to $51.1 billion in January, compared to $59.9 billion the month before.

Economists had predicted a trade deficit of about $57 billion in January. The decline is the sharpest drop since March 2018.

Exports increased by 0.9 percent to $207.3 billion in the first month of the year, while imports fell 2.6 percent to $258.5 billion.

American exports to China dropped to $7.1 billion, a 22.3 percent decrease that marks the lowest level of exports to the country since September 2010. Imports from China also fell 9.6 percent to $41.6 billion, according to a Commerce Department report released Wednesday.

The overall trade deficit with China dropped to $34.5 billion, a 6.4 percent decrease.

The gains in exports came largely from cars and soybeans, which Beijing had pledged to buy more of as a gesture of goodwill in the ongoing trade dispute.

Closing the trade gap with China has been a top priority for the Trump administration, which has levied tariffs against imports from China such as cars and cellphones, as well as steel and aluminum from Canada, Mexico and the European Union.

President Donald Trump has vowed since the 2016 campaign to lower the trade deficit, saying the gap is the result of bad trade deals by past administrations.

The latest rift between the two countries comes from U.S. claims that Chinese telecom giant Huawei stole trade secrets, specifically a robot from T-Mobile to improve its own lesser-quality phones. The Chinese company is also accused of trampling on anti-Iranian sanctions.

Negotiators from America and China are meeting this week in hopes of resolving the trade dispute.

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