The U.S. trade deficit narrowed in April as exports surged to a record level. According to data released by the Commerce Department on Tuesday, the smaller deficit was partly driven by higher energy prices linked to the U.S.-backed conflict with Iran, which has disrupted shipping through the Strait of Hormuz. Petroleum exports also climbed to an all-time high during the month.
The U.S. trade deficit narrowed by 1.2 percent to $55.9 billion in April, according to data from the Commerce Department’s Bureau of Economic Analysis and the Census Bureau. March’s trade gap was also revised downward to $56.6 billion from the previously reported $60.3 billion.
Higher oil prices drive petroleum exports to all-time high
U.S. exports rose 2.6 percent to a record $327.1 billion in April, driven by a 4.1 percent increase in goods exports, which reached an all-time high of $221.3 billion. Capital goods exports climbed by $4 billion, supported by stronger shipments of computers and civilian aircraft.
Exports of industrial supplies and materials, including petroleum, also hit record levels. Petroleum exports reached an all-time high, aided by increased volumes and firmer oil prices amid tensions in the Middle East. Consumer goods exports also increased by $1.7 billion.
Meanwhile, imports grew 2 percent to $383 billion in April. Goods imports advanced 2.1 percent to $304.9 billion, largely due to a $7 billion rise in capital goods imports, particularly computers, semiconductors and telecommunications equipment, as companies stepped up investments in artificial intelligence infrastructure.
However, imports of industrial supplies and materials declined by $0.9 billion during the month. As a result, the goods trade deficit narrowed 2.8 percent to $83.7 billion. After adjusting for inflation, the goods trade gap shrank by $1.5 billion, or 1.8 percent, to $84.3 billion.
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U.S. goods trade deficit with China narrows to $12 billion
Trade has weighed on U.S. economic growth for the past two consecutive quarters, reducing its contribution to gross domestic product (GDP).
The U.S. goods trade deficit with China narrowed by $2.6 billion to $12 billion in April, as both exports and imports declined. The United States continued to record goods trade deficits with several major trading partners, including China, Taiwan, Vietnam, Mexico, the European Union, Canada and South Korea.
Meanwhile, the U.S. trade surplus with the United Kingdom fell by $3.8 billion to $2.6 billion in April, reflecting declines in both exports and imports.
In the services sector, exports slipped by $0.4 billion to $105.8 billion, weighed down by weaker travel, transportation and maintenance and repair services. However, exports of other business services increased. Services imports rose sharply by $1.3 billion to $78 billion, supported by higher spending on transportation, travel and insurance services.
