The U.S. trade deficit dropped more than expected in November ahead of negotiations that tempered an escalating tariff battle with China.
According to a report released today by the Commerce Department, the gap narrowed 8.2% to $43.1 billion in November — the smallest figure since October 2016 and the largest percentage drop since January. Economists had forecast the deficit to decrease to $43.8 billion.
The goods and services deficit has fallen 0.7% through November and is on track to log its first annual decline since 2013. It marks a victory for President Donald Trump, who has made reducing the trade gap a top priority of his administration.
Further noted in the report: The overall value of exports rose 0.7% to $208.6 billion, while imports sank by 1% to $251.7 billion. It also reflected a decrease in Chinese imports — the deficit slumping $2.2 billion to $25.6 billion in November, with a $1.4 billion surge in exports and an $800 million dip in imports — following more than a year and a half of tit-for-tat duties.
In mid-December, the U.S. and China confirmed that they had reached a partial trade deal, with Trump nixing a 15% levy on hundreds of billions of dollars’ worth of Chinese goods, including footwear, apparel and accessories, that was scheduled to take effect on Dec. 15. As part of the limited agreement, Washington has insisted that Beijing purchase greater quantities of agricultural and other products, and negotiators have sought better protection for U.S. intellectual property and wider access to China’s financial services sector.
The U.S. currently has in place a 25% tariff on roughly $250 billion worth of Chinese products and a 15% levy on roughly $112 billion.
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