March trade deficit falls as exports hit record high
- Author: Lawrence Cooper May 05, 2018,
May 05, 2018, 1:32
Economists predicted the March figure would narrow to C$2.25 billion.
Record exports trimmed the US trade deficit in March, the first drop in seven months in a massive gap that President Donald Trump is determined to shrink with an aggressive America first policy.
America and China are engaged in a tit-for-tat dispute over import tariffs, which has sparked volatility in markets since the scrap began in March.
Canadian two-way trade with non-U.S. countries flourished in March.
Exports of aircraft and other transportation equipment and parts rose 24.3 per cent in March to $2.3 billion, while farm, fishing and intermediate food products increased 14.7 per cent to $2.8 billion. But that was offset by a $69.5 billion deficit in the trade of goods.
The administration is also seeking to renegotiate the North American Free Trade Agreement with Mexico and Canada, and has slapped tariffs on imported steel and aluminum.
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While Canada's trade deficit increases and overall economy wobbles, our Southern neighbor has rapidly shrunk their deficit and grown their market bringing with it new investments and jobs. The difference means that net trade likely subtracted about 1 percentage point from Canada's annualized rate of gross domestic product growth in the quarter, economists said - the third straight quarter that trade has been a drag on growth.
Exports to China jumped 26.3 per cent in March. In a separate report, the Labor Department said initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 211,000 for the week ended April 28.
During the first quarter of the year, nevertheless, the United States trade deficit grew 18 per cent from the same period in 2017, with exports rising 6.8 per cent and imports increasing 9.1 per cent.
Meanwhile, U.S. exports climbed 2% from February to their highest dollar value on record including larger shipments overseas of civilian aircraft, soybeans, corn and crude oil. There were also increases in exports of soybeans, corn and crude oil.
The United States ran a $20.5 billion surplus in the trade of services such as education and banking.
Imports of goods and services fell 1.8 percent to $257.5 billion, in part as the boost from royalties and broadcast license fees related to the Winter Olympics faded. Imports of capital goods fell by US$1.5 billion, weighed down by declines in imports of computer accessories, telecommunications equipment and semiconductors. Exports excluding energy products rose 3.6 percent. After improving from 2011 to 2016, but worsening in 2017, the NAFTA first-quarter 2018 goods deficit is up slightly relative to the first quarter of 2017 - an increase from $49.1 billion to $49.6 billion.