US trade deficit drops 15%

US trade deficit drops 15%

US trade deficit drops 15%

With exports climbing and imports falling, the Commerce Department released a report on Thursday showing a significantly narrower US trade deficit in the month of March.

The deficit slid to $49 billion in March from $57.7 billion in February, the Commerce Department said (https://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm) Thursday.

Canadian government bond prices were higher across a flatter yield curve, with the two-year CA2YT=RR up 3.5 Canadian cents to yield 1.918 percent and the 10-year CA10YT=RR rising 29 Canadian cents to yield 2.330 percent.

The U.S. trade deficit narrowed sharply in March as exports increased to a record high amid a surge in deliveries of commercial aircraft and soybeans, bolstering the economy's outlook heading into the second quarter.

However, the deficit was still up 18.5% in the first quarter compared to the same period past year, at $25.5 billion.

Big picture: The sharp drop in the trade deficit in March prevented a steeper decline in gross domestic product, the official scorecard for the USA economy.

Exports to China jumped 26.3% in March. Thursday's report showed the dollar value of bauxite and aluminum imports increased in March from the prior month, as did imports of iron and steel mill products.

"Whatever they're buying is non-U.S.", Soren Schroder, CEO of agriculture corporation Bunge Limited, told Bloomberg Wednesday.

At 9:14 a.m. EDT (1314 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent higher at C$1.2868 to the greenback, or 77.71 US cents. -China trade. NAFTA talks must be completed within weeks for a pact to be voted on this year, but only a deal that removes NAFTA's job outsourcing incentives and adds strong and strictly enforced labor and environmental standards could change the trade deficit trends. "Negotiations are the best way to resolve the problem".

US President Donald Trump has threatened tariffs on up to US$150 billion worth of Chinese goods to punish Beijing over its joint-venture requirements and other policies Washington says force American companies to surrender their intellectual property to state-backed Chinese competitors. The economy grew at a 2.9 percent rate in the fourth quarter. Bilateral trade was led by higher imports of passenger vehicles and higher exports of crude oil.

The Canadian dollar slipped to C$1.2870 to the USA dollar, or 77.70 US cents, from C$1.2840, or 77.88 US cents before the data were released.

Imports of goods and services fell 1.8 per cent to US$257.5 billion, in part as the boost from royalties and broadcast licence fees related to the Winter Olympics faded.

"Looking ahead, the surveys suggest that import growth will accelerate over the coming months", said Andrew Hunter, U.S. Economist at Capital Economics.

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