The U.S.’s trade deficit shrank in March to the lowest point since September of 2017, even as President Donald Trump’s trade negotiations are heating up.
The difference between what America exports and what it imports is down to $49 billion, lower than the $57.7 billion deficit in February, according to the Department of Commerce.
Exports for March reached a record high of $208.5 billion, with increases in many goods and services exports, particularly to China.
Although not close to the “One Billion Dollar reduction” in China’s “massive Trade Deficit with the United States” Trump tweeted about in March, the deficit in March was $26 billion — 11.6 percent less than the monthly deficit for February.
The declining trade deficit is due in large part to rising exports of civilian aircraft, but soybeans and corn also saw increases, according to the data. U.S. companies increased commercial plane exports by $1.9 billion in March, selling a total of $5.9 billion overseas that month.
While March was a good month for soybean producers, the future spells trouble with escalating tariff threats between China and Washington. Even though the negotiations over China’s trade practices hasn’t become a full-fledged trade war, it looks like the country has already stopped buying American soy, according to a report from Bloomberg.
China canceled orders for nearly 63,000 metric tons of soybeans over two weeks in mid-April, and another 133,718 metric tons for the last full week in April, according to U.S. Department of Agriculture data.
“Whatever they’re buying is non-U.S.,” Soren Schroder, CEO of agriculture corporation Bunge Limited, told Bloomberg Wednesday. “They’re buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the U.S.”
A delegation from the Trump administration is in Beijing this week to discuss trade issues including the huge trade deficit, property issues and China’s subsidy structure.
The Chinese newspaper Global Times, a mouthpiece for the government, wrote Thursday that “Washington and Beijing should be clear: neither side can scare the other down. Negotiations are the best way to resolve the problem.”
In response to Trump’s plan to levy tariffs on about $150 billion of Chinese products, China targeted about $50 billion U.S. products, with soybeans and small planes included.
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