US trade deficit sees bigger-than-expected drop in February

Imports and Exports | | MIC Customs Solutions |

The US trade deficit narrowed during February 2017, with a downturn in imports accompanied by a rise in export numbers.

The US trade deficit fell by a greater-than-expected margin during February 2017, according to the latest data from the US Commerce Department.

A drop in imports during the month contributed to this fall, with domestic demand for imported goods such as cars, mobile phones and other consumer goods all seeing a drop. At the same time, stronger global growth bolstered exports of American goods.

As such, the country's trade deficit declined by 9.6 per cent to $43.6 billion (€41.01 billion), which was lower than the economists' forecast of $44.8 billion. This comes after the deficit hit a near two-year high of $48.2 billion in January.

Of note was the fact that the trade gap with China narrowed sharply by 26.6 percent from January to $23 billion. Though this is largely to do with seasonal trends, this remains a politically sensitive issue due to the strained relations between the nations.

A summit between president Donald Trump and Chinese premier Xi Jinping is taking place this week, with Mr Trump seeking to secure a trade relationship with China that delivers more benefits for the US.

However, Chris Rupkey, chief economist at MUFG Union Bank in New York, said: "The US has its work cut out for it if it is going to try to alter the pattern of trade that has developed between China and US companies over the last ten to 20 years."