The US trade deficit narrowed in March, under the effect of a drop in imports combined with an increase in exports, particularly energy, according to data released Thursday by the Commerce Department. The deficit of goods and services with the rest of the world reached 64.2 billion dollars, 9.1% less in one month and below the expectations of analysts, who anticipated a less marked fall with a deficit of 68.7 billion dollars, according to the consensus published by briefing.com.
In one year, the US deficit narrowed considerably, to 27.6%, once again benefiting from both rising exports and falling imports. “It is very likely that trade flows will continue to show the effects of slowing growth, both domestic and global, in the coming months,” HFE chief economist Rubeela Farooqi said in a note.
Reduction of trade deficits with China and the EU
Exports increased 2.1% while imports fell 0.3%. This decline refers in particular to commercial equipment and raw materials, a sign of a drop in investments, particularly in industry. By contrast, imports of consumer products are on the rise, especially in household appliances, smartphones and, to a lesser extent, pharmaceuticals. On the export side, the increase refers mainly to energy, oil and gas, despite a drop in average prices in March compared to February.
If we focus on bilateral trade, the trade deficit with China, which is still the highest, continues to narrow little by little, a sign of the persistent slowdown in trade between the world’s two largest economies. It reached $22.9 billion in March with, again, a drop in imports and an increase in exports. Same trend with the European Union, both for the overall deficit and for exports and imports. It should be noted that the US deficit vis-à-vis Europe is largely concentrated in three countries: Germany, Ireland and Italy.
Source: BFM TV
