Trade Deficit Falls Sharply

The trade deficit fell sharply in March to $49.0 billion with the Chinese deficit, amid all the talk of trade war, narrowing sharply to $25.9 billion from February's $29.3 billion. Import tariffs on steel and aluminum were imposed late in the month but they didn't stem steel imports which rose to $2.8 billion compared to $2.2 billion in February.

March's results are actually very positive. Exports rose 2.0 percent in the month to $208.5 billion at the same time that imports fell 1.8 percent to $257.5 billion. Goods exports, led by capital goods and including a gain for food products, climbed 2.7 percent to $140.9 billion with service exports up 0.6 percent to a very solid $67.7 billion.

Conclusions have to be taken cautiously since many of the details, including the country deficit which China, are unlike the headline and not adjusted for seasonal and calendar issues. But trends may begin to appear in the months ahead with the outlook hinting at a narrowing with China with metal imports eventually to come down.