U.S. trade deficit down in March

$43.7B gap a six-month low; imbalance with China grows

WASHINGTON — The U.S. trade deficit narrowed in March to the lowest level since October as both exports and imports fell. But the politically sensitive trade gap with China rose.

The Commerce Department said Thursday that the gap in goods and services slipped to $43.7 billion, down from $43.8 billion in February. Exports dropped 0.9 percent to $191 billion, pulled down by falling auto exports. Imports fell 0.7 percent to $234.7 billion as imports of crude oil and other petroleum products slid.

President Donald Trump was elected on a pledge to reduce America’s trade deficits, which he blames on unfair trade practices by China and other countries. The president said trade deficits are responsible for the loss of hundreds of factories and millions of manufacturing jobs.

Economists are trying to look beyond the trade climate of the first two months of the year, with fluctuations that analysts attributed to the timing of the Chinese New Year holiday.

The latest figures might provide some more ammunition for Trump administration officials as they seek to reduce the trade gap and wring more favorable terms from trading partners, analyst said.

So far this year, the trade deficit is up more than 7 percent to $135.6 billion. For all of last year, the gap exceeded $500 billion.

A shrinking trade deficit

adds to economic growth. Andrew Hunter, U.S. economist at Capital Economics, said the improving trade picture provided a modest boost to first-quarter U.S. growth and “may end up being a

small positive” in the second quarter, too.

The trade deficit in goods with China rose 7 percent to $24.6 billion in March from $23 billion in February on rising imports of Chinese cellphones and telecommunications equipment.

The goods gap with the European Union rose 19

percent to $ 11.2 billion in March.

The trade deficit with Mexico widened 22 percent to $ 7 billion, the highest since November 2007, as imports rose to a record $28.1 billion.

Trump has vowed to renegotiate the North American Free Trade Agreement with

Mexico and Canada.

But he reneged on a promise to call out China for manipulating its currency to give its exporters a price advantage, saying that China is cooperating in dealing with a belligerent North Korea.

AP/PATRICK SEMANSKY A container is unloaded from a ship at the Port of Baltimore in this file photo. So far this year, the U.S. trade deficit is up more than 7 percent, reports show.