The deficit in goods and services edged up 1.5% to $50 billion in March after falling 3.6% in February, the Commerce Department reported Thursday. The deficit is the difference between what America sells to the rest of the world and what it imports.
Exports rose 1% to $212 billion in March while imports rose a slightly faster 1.1% to $262 billion.
The deficit in goods with China dropped 16.2% to $20.7 billion, the lowest level since March 2014.
Paul Ashworth, chief U.S. economist for Capital Economics, said that about one-fourth of the improvement in U.S. exports came from increased sales of American soybeans, which he said would be put "at risk of being reversed if the (U.S.-China) trade talks collapse amid acrimony and higher tariffs." China is a major buyer of U.S. soybeans.
The United States and China have been locked in a trade war for the past year with a new round of U.S. tariffs scheduled to go into effect Friday. Negotiators from both countries are scheduled to meet Thursday and Friday in Washington for an 11th round of talks aimed at reaching an agreement to ease economic tensions between the world's two biggest economies.
The new trade report showed that the deficit with China for the first three months of this year totals $80 billion, still the largest with any country but down 12.2% from the same period a year ago.