WASHINGTON: The US trade deficit drifted lower in March despite record imports from Mexico and a drop in total exports, the Commerce Department reported Thursday.
Rising oil import prices, which hit a near two-year record, helped fuel the trade deficit, which has become a central focus of the Trump administration’s nationalist economic agenda.
The trade gap slipped 0.1 percent in March to $43.7 billion, seasonally adjusted. Analysts had expected a 1.4 percent increase, according to a consensus forecast. Total exports fell 0.9 percent for the month to $191 billion, the biggest drop since October. Imports were also down, falling 0.7 percent to $234.7 billion.
Imports from Mexico hit $28.1 billion, their highest on record, pushing the deficit with the southern neighbor to its highest level in nearly 10 years. President Donald Trump is poised to renegotiate the North American Free Trade Agreement, which links Canada, Mexico and the United States, and has threatened to pull out unless the US gets a favorable deal. He has called NAFTA a “disaster.”
The flow of US goods and services to several other trading partners criticized by the Trump administration were robust in the latest month.
Exports to the European Union and South Korea hit all-time monthly records at $25.7 billion and $4.4 billion respectively while exports to Germany were the highest in nearly nine years at $5 billion.
But a four-year record for Japanese imports, valued at $13.3 billion, saw the US deficit with that country hit its highest level since April 2008 at $7.6 billion.
Monthly oil imports rose to their highest level in nearly four years at 260 million barrels. Production cuts agreed to last year by petroleum producing countries helped drive up the average import price to $49.33, the highest since August 2015.
