U.S. reduces trade gap on lower imports

The United States shaved 5.6 percent off its trade deficit in March to $58.2 billion as imports of goods dropped $6 billion to $173.3 billion, according to the Commerce Department. The trade deficit was $61.7 billion in February.

In annual terms, the trade deficit decreased $4.8 billion compared to March 2007 figures, with exports up $20 billion, or 15.5 percent, and imports up $15.1 billion, or 7.9 percent.

The slowdown in imports has been reflected in diminishing container volumes since last year as the economy slowed in the face of troubles in the housing and financial markets and a resulting pullback in consumer spending.

March imports were $206.7 billion compared to $212.8 billion in February. The 2.9 percent import drop is the most since December 2001.

Analysts note that a greater drop in import demand was masked by the skyrocketing cost of imported oil to more than $110 per barrel in March.

Total exports were also down for the first time in a year, falling to $148.5 billion versus $151.1 billion in the previous month. The export decline was attributed to a temporary drop in commercial airplane exports.

The export market is still expected to be a strong economic driver as the weak dollar continues to spur interest in cheaper U.S. goods. 

Source: American Shipper