U.S. Trade Deficit Narrows to Just $50.8B in April, Meeting Forecast

The U.S. trade deficit for goods and services narrowed $1.1 billion in April to just $50.8 billion, meeting the consensus forecast. The continued narrowing of the trade balance — which media analysts did not expect — will be a net positive for gross domestic product (GDP).

The month of March was revised slightly higher to $51.9 billion.

In April, exports were $206.8 billion, or $4.6 billion less than in March Imports were down $5.7 billion to $257.6 billion.

The decrease in the U.S. trade deficit for goods and services reflected a $1.0 billion decrease in the goods deficit to $71.7 billion and a $0.1 billion increase in the services surplus to $20.9 billion.

3-Month Moving Averages for Trade Balance

The average goods and services deficit fell $0.6 billion to $50.9 billion for the three months ending in April. The average for exports declined $0.2 billion to $209.3 billion, while imports fell $0.8 billion to $260.2 billion.

U.S. Trade Deficit With China Amid Trade War

The politically-sensitive U.S. trade deficit with China decreased $22.9 billion to $80.8 billion in Q1 2019. Exports rose $4.9 billion to $41.4 billion and imports declined $18.0 billion to $122.2 billion.

In May, President Donald Trump announced the U.S. increased tariffs on China from 10% to 25%, a sharp increase worth more than $200 billion amid ongoing trade negotiations.

While Wall Street and D.C. have largely opposed the president’s tariff strategy, the trade gap between the two nations is clearly narrowing. U.S. markets reacted negatively to the announcement, but are rebounding.

In Shanghai, the SSE Composite Index (^SSE) closed −33.62, or 1.17% to 2,827.80. It was at 2,939.21 prior to the latest round of tariffs.

U.S. Trade Deficit With Selected Countries, Areas