Trump's favourite scorecard in the trade war with China took a hit in April

Feng Li/Getty Images
  • The gap between all American products shipped abroad and goods the US imported shrank in April as both exports and imports fell.
  • The politically sensitive trade deficit in goods with China jumped, however, likely drawing ire from President Donald Trump as Washington remains locked in a tariff dispute with Beijing.
  • Trump views the trade balance as a scorecard of sorts in his economic wars.

The gap between all American products shipped abroad and goods the US imported fell at the start of the second quarter, while the politically-sensitive deficit with China increased.

The Commerce Department on Thursday said the goods and services trade deficit narrowed by about 2% to a seasonally adjusted $US50.8 billion in April as both exports and imports dropped. The balance for March was revised higher to $US51.9 billion from original estimates of $US50 billion.

The trade deficit in goods with China jumped nearly 30% to $US26.9 billion, likely drawing ire from President Donald Trump as Washington remains locked in a tariff dispute with Beijing.

Trump views the trade balance as a scorecard of sorts in his economic wars. The figure is driven by many factors, however, including foreign-exchange rates, the strength of an economy, and the amount a country borrows from abroad.

April’s trade balance was recorded before major escalations between the world’s largest economies. In May, high-level negotiations between the two sides broke down after the US accused China of backtracking on past commitments in a draft deal.

Trump has since raised tariffs on Chinese products and threatened to extend them to a broader range of products, prompting retaliatory measures from Beijing.

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