US trade deficit drops sharply to $43.6 billion in February

China could deliver counterpunch in Trump trade talks

The U.S. trade deficit declined sharply in February as imports from China fell by a record amount and American exports rose for a third straight month.

The Commerce Department says the deficit fell to $43.6 billion in February, 9.6 per cent below January's deficit of $48.2 billion.

Exports rose a tiny 0.2 per cent to $192.9 billion. Imports dropped 1.8 per cent to $236.4 billion as the flow of Chinese goods tumbled by $8.6 billion, led by a big drop in cellphone imports.

The politically sensitive trade deficit with China narrowed to $23 billion, 26.6 per cent below the January total. President Donald Trump, who was sharply critical of Chinese trade practices during last year's presidential campaign, will hold his first meeting with Chinese President Xi Jinping later this week in Florida.