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Dismal Chinese imports push American trade deficit to eight-month minimum

Dismal Chinese imports push American trade deficit to eight-month minimum

Information is not investment advice

In February, the American trade deficit headed south to an eight-month minimum because imports from China went down, suggesting that President Donald Trump's "America First" stance was finally starting to bear fruit.

The shocking narrowing in the trade gap posted by the Commerce Department on Wednesday also suggested a much stronger tempo of the American economic surge in the first quarter than initially expected at the beginning of 2019.

The 20.2% tumble in imports from China turned out to be the key driver behind an almost 3.4% improvement in the American trade deficit to $49.4 billion in February, as data from the Commerce Department revealed. Apparently, the trade deficit has shrunk for two straight months.

Market experts had predicted that the trade shortfall would extend to $53.5 billion in February.

In addition to this, the politically sensitive goods trade deficit with China, which is a focus of the current US presidential administration's protectionist trade stance, headed south by 28.2% hitting $24.8 billion in February because American exports to the world's number two economy headed north by about 18.2%.

However, even with the improvement, the trade deficit is still huge and February's dive in Chinese imports could appear to be temporary. For the last time, the trade data has been volatile against the backdrop of big swings between imports and exports due to the fact that America’s conflicts with trading partners, in particular, China.

The previous year, the American cabinet slapped levies on $250 billion worth of Chinese goods, with the counterpart repelling it with tariffs on $110 billion worth of US products.

In February, the American goods trade deficit headed south by 1.7% hitting $72.0 billion that appears to be the lowest value since last June.



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