US trade deficit shrinks as exports to China surge
The US trade deficit narrowed again in February, the government said today, reaching its lowest figure in seven months as the Trump administration continues to wage tariff wars around the globe.
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The goods trade deficit with China decreased by 28 per cent in February from January, in news that will please the White House. The deficit has long drawn the ire of President Donald Trump who says it damages US producers.
The US’s overall deficit in goods and services fell by 3.4 per cent in February from January, driven by an increase in exports of 1.1 per cent, the Commerce Department said. It had also fallen in January from December, and now stands at $49.4bn (£37.9bn).
Goods exports to China increased 18 per cent in February compared to January and imports decreased 20 per cent.
Compared to February 2018, the goods and services deficit decreased by 7.6 per cent, or $7.8bn.
The goods deficit with China has long been an obsession of Trump’s. Last year his administration imposed $250bn worth of tariffs on goods imported from China, causing Beijing to retaliate with their own levies on $110bn of US goods.
Trade talks between the two sides have been going on for months, but recent signs of progress have somewhat cheered markets.
Last week US treasury secretary Steve Mnuchin told CNBC that the two sides had almost reached agreement on a mechanism to enforce the rules of a trade deal, which had been a sticking point.
At the beginning of the month Trump told a press conference: “The deal is coming along really well.” He said the two sides had agreed “on a lot of the most difficult points” but said there were still “some ways to go”.
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Only a few days before, stock indexes rose when Mnuchin Tweeted that the ongoing talks were “constructive”.
Neither side has said when they expect the talks to wrap up.