WASHINGTON – The U.S. international trade gap narrowed to a below-expectations $43.6 billion with imports of crude oil up and autos down, while exports showed gains in consumer goods, pharmaceuticals and industrial supplies while capital goods softened.
The deficit in goods alone was $65 billion, close to what the advance report a week ago showed at $64.8 billion.
The February services trade surplus was $21.4 billion, up $100 million from January.
The overall January deficit was revised to be narrower by $300 million to be $48.2 billion.
Overall exports rose $400 million to $192.9 billion, with goods exports up $400 million to $128.5 billion.
Imports overall were down $4.3 billion to $236.4 billion with goods imports down $4.2 billion to $193.4 billion.
Crude oil imports were up $1.3 billion and autos were $2.6 billion less.
By countries, the largest deficit, as usual, was with China, widening by $1.6 billion to $32.7 billion. The deficit with Japan narrowed by $600 million to $4.9 billion. The deficit with the EU was $12 billion and with the UK, the balance shifted from a deficit to a $900 million surplus.
For the first two months of this year, the U.S. deficit is running 3.1% wider than the same period last year.
Nearly half of the annual goods deficit is due to transactions with China which generated $347 billion in trade red ink last year, a total President Donald Trump suggested in a tweet last week will make his talks Thursday and Friday with China President Xi Jinping "very difficult."
Trump Friday signed two executive orders, one which calls for a review of all country-by-country trade relationships to identify the causes of trade deficits, a review that was already under way at the Commerce Department. The other order seeks to sharpen the U.S. vigilance to detect violations of existing trade agreement and to collect nearly $3 billion in penalty tariffs and duties never pursued.
Many experts and even some Republican members of Congress have criticized Trump's emphasis on the trade deficit, saying it is not the best metric to assess the net value of trade to the country's economy, particularly since trade generates a relatively small part of U.S. GDP.
