U.S. trade deficit widens in February

The mounting gap comes as President Donald Trump pursues an increasingly fraught battle with the world's largest economies to right the yawning US trade balance sparking fears of a trade war

"By our calculations, the tax legislation and two-year budget deal will add $205 billion to the federal budget deficit this year, which increases the nominal trade deficit by $75 billion", said Ryan Sweet, an economist at Moody´s Analytics in West Chester, Pennsylvania. However the gap with China shrank 2.3% from January.

A report released by the Commerce Department on Thursday showed the United States trade deficit widened by more than anticipated in the month of February.

The figures suggest trade may reduce the pace of economic growth in the first quarter, after it was a substantial drag on the economy in the final three months of 2017.

A decade of steady job growth and rising incomes has driven stiff demand among consumers and industry in the world's largest economy.

Figures show that while the United States exported goods and services worth $204.4 billion, it imported $262 billion's worth.

Andrew Hunter, US Economist at Capital Economics, noted the wider trade deficit was entirely due to a one-off royalty payment for broadcasting rights to the Winter Olympics.

Tit-for-tat exchanges of tariff threats from Washington and Beijing have whipsawed global stock markets this week, prompting the Trump administration to call for calm and point to negotiations as a likely course of action.

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Separately, data released in Washington showed the USA trade deficit in February rose to a near 9-1/2 year high.

The trade gap has continued to rise since Trump entered the White House partly because the USA economy is strong and American consumers have an appetite for imported products and the confidence and financial wherewithal to buy them.

Mr Trump has said he wants America's deficit with China to decline by $100bn.

The goods deficit with Mexico jumped by $1 billion to $6.6 billion while it rose with Europe by $300 million to $15.3 billion.

Exports rose 0.4 percent as shipments of motor vehicles and parts rebounded five percent following atypical Canadian auto plant closures in January. But so did imports, which likewise gained 1.7 percent to reach $262 billion - also an all-time record.

Exports of cars and auto parts posted big increases in February as did imports of pharmaceuticals, crude oil and civilian aircraft. The blue-chip Dow Jones Industrial Average was up 1.3 percent toward 1600 GMT.

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