The U.S. trade deficit narrowed further in April even as tariff threats between the U.S. and its major commercial partners fed fears of a trade war.
The deficit shrunk 2.1% to $46.2 billion in April from the downward-revised $47.2 billion in March. Economists had forecast the deficit would be $49 billion, according to Econoday.
The goods deficit decreased by $1.0 billion to $68.3 billion, while the services surplus fell by less than $100 million to $22.1 billion, the U.S. Census Bureau said.
Imports were down 0.2% to $257.4 billion, while exports rose 0.3% to $211.2 billion.
The deficit with China narrowed by $3.4 billion, to $30.8 billion in April, with exports and imports both down.
China reportedly offered to buy nearly $70 billion of American farm and energy products following weekend trade talks with the U.S. This was the latest in a string of measures announced by Beijing as it moves to dodge Washington's planned 25% tariff on $50 billion of goods.
On an unadjusted basis, the deficit with China ballooned to $27.96 billion in April from $25.88 billion in March.
The deficit with Canada widened to $785 million from a surplus of $339 million, while that with Mexico fell to $5.65 billion from $8.05 billion. With the EU, the U.S. posted a deficit of $14.64 billion in April, up from $12.15 billion in March.
The U.S. said in May that it will impose tariffs on steel and aluminum from Canada, Mexico and the EU, all of which had been exempted from the measure. The EU responded June 6 by endorsing additional duties on about €2.8 billion of U.S. products. Mexico has also moved to impose equivalent measures against the U.S., while Canada announced its own retaliatory tariffs against American goods worth C$16.6 billion.
