The U.S. trade deficit fell to a seven-month low in April as exports rose to a record high, lifted by an increase in shipments of industrial materials and soybeans.
But a protectionist trade policy being pursued by President Trump poses a threat to this positive economic outlook.
“One is hard-pressed as to not concur that the U.S. economy not only remains on solid footing, but is likely to show an accelerated pace of growth in the second quarter,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.
Still, “trade tensions remain a threat to the outlook and clearly have the potential to derail economic growth,” he said.
The Commerce Department said the trade gap narrowed 2.1 percent to $46.2 billion, the smallest since September. Data for March was revised to show the trade deficit falling to $47.2 billion, instead of the previously reported $49.0 billion.