WASHINGTON (MarketWatch) — U.S. trade deficits in goods with Mexico and Japan hit the highest levels in March in almost a decade, though the nation’s trade gap overall was virtually unchanged.
The deficit dipped 0.1% to $43.7 billion in March to reach a five-month low, the Commerce Department said Thursday. Economists polled by MarketWatch had forecast a $44.5 billion gap.
Exports slid 0.9% to $191 billion, largely reflecting fewer shipments of pharmaceutical drugs and American-made cars. Imports edged down 0.7% to $234.7 billion.
The Trump administration has made slashing the trade deficit one of its priorities, particularly the large gaps with China and Mexico. Yet these deficits are the byproduct of major economic changes in the U.S. and its trading partners over a long period that won’t be eradicated easily or quickly.
The trade gap with Mexico in goods climbed 22% to $7 billion in March as imports of set a record. That’s the biggest deficit with the southern neighbor since November 2007, a month before the start of the Great Recession.
The U.S. trade deficit in goods with Japan, meanwhile, leaped 55% to $7.2 billion to mark the highest level since April 2008.
Mexico and Japan are both big suppliers to the U.S. of autos and parts, whose imports soared in March.
These unadjusted country trade figures are highly volatile, however, and can exhibit sharp ups and downs from month to month.
The trade deficit has long been a drag on the official scorecard for the U.S. economy, known as gross domestic product. Yet it’s been relatively stable over the past few years.
On the bright side, an improved global economy is stoking demand for U.S. exports, while Americans buoyed by an nearly eight-year-old expansion are more able to afford imports.
In recent trading, the Dow Jones Industrial Average DJIA, -0.03% fell slightly.