The U.S. trade deficit narrowed in April to $68.9-billion as an improving global economy boosted sales of American exports.
The April deficit, the gap between what America buys from abroad and what it sells to other countries, was down 8.2 per cent from a record March deficit of $75-billion.
The improving economic situation overseas drove up demand for American goods while domestic demand for imports slowed.
In April, exports of U.S. goods and services rose 1.1 per cent to $205-billion while imports declined 1.4 per cent to $273.9-billion.
Through the first four months of the year, the U.S. trade deficit totals $281.7-billion, up 50.4 per cent from the deficit during the same period in 2020, a time when the U.S. economy was essentially shut down because of the coronavirus pandemic.
The politically sensitive deficit with China fell to $25.8-billion in April, down 6.7 per cent from the March imbalance. But through the first four months of this year, the deficit with China, the largest the United States runs with any country, was up 37.1 per cent over the same period a year ago.
The deficit in just goods in April totalled $86.7-billion while the surplus in services totalled $17.8-billion. The United States runs surpluses in services trade which help lower the goods deficit. However, the services economy, which includes travel payments such as airline fares, has been hit hard by the coronavirus with the service surplus down 16.2 per cent so far this year compared to the same period a year ago.
During his four years in office, Donald Trump pursued a get-tough trade strategy that used punitive tariffs on other country’s exports in an effort to lower America’s huge trade deficits with the rest of the world, which he blamed for the loss of millions of American manufacturing jobs.
But Trump’s efforts failed to alter the trade imbalances. So far, the Biden administration has left most of the penalty tariffs in place as his administration works to determine the approach it will take to trade.
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