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US trade deficit sharply narrows in April as Trump tariffs take hold / Photo: © AFP/File
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US trade deficit sharply narrows in April as Trump tariffs take hold
The US trade deficit more than halved in April, government data showed Thursday, pulling back from a record as imports on a plunge in imports as President Donald Trump's global tariffs kicked in.
The world's biggest economy logged a trade gap of $61.6 billion in the same month that Trump unveiled 10 percent levies on almost all trading partners. This was down by 55.5 percent from March, said the Commerce Department.
In March, the overall US trade deficit widened to a new record of $138.3 billion as businesses sought to get ahead of Trump's promised duties.
But imports slumped by 16.3 percent in April to $351 billion as the blanket tariffs on US allies and competitors alike kicked in.
Apart from the 10 percent levy, Trump also announced -– before swiftly pausing –- higher rates on dozens of economies including the European Union and Japan. This halt, which allowed room for trade negotiations to take place, is due to expire in early July.
Goods from China were the biggest target of Trump's during the month as the world's two biggest economies engaged in a tit-for-tat escalation that took both sides' levies on each other's products to three digits.
This brought many shipments from China to a halt before the countries reached a temporary deal to de-escalate the situation.
For now, all eyes are on a phone call between Trump and Chinese President Xi Jinping, amid hopes that both leaders can help bring about a longer-lasting truce.
But the state of a trade deal between both countries remains uncertain as Trump last week accused Beijing of violating the terms of their temporary agreement -- which China denied.
In April, US imports dropped by 16.3 percent to $351 billion on a retreat in goods shipments.
In particular, imports of consumer goods fell by $33 billion, data showed, with pullbacks in pharmaceuticals and cell phones.
US exports ticked up by 3 percent to $289.4 billion, helped by goods exports such as those of industrial supplies.
But US exports of autos and parts dropped by $3.3 billion.
Besides wide-ranging tariffs targeting different countries, businesses have also been contending with sector-specific duties that Trump has rolled out in recent months.
In March and April, the president slapped tariffs on imports of steel, aluminum and automobiles and he has since doubled the duties on both metals this month.
The overall US deficit was the smallest since early 2023, according to government figures.
P.Nowak--GL
