April 17 (UPI) -- The U.S. goods and services trade deficit dropped 3.4 percent to $49.4 billion in February, its lowest level since June 2018, according to a report released Wednesday by the Census Bureau and the Bureau of Economic Analysis.
The $1.8 billion drop was boosted by U.S. exports increasing 1.1 percent to $209.7 billion, while imports rose just 0.2 percent to $259.1 billion. Goods and services for the year decreased 7.6 percent, to $8.3 billion, from the same period in 2018.
Year-to-date, U.S. exports have increased $11.1 billion, or 2.7 percent, while imports have increased $2.8 billion, or 0.5 percent.
Dow Jones had expected the U.S. trade deficit to actually increase in February to $53.8 billion after surveying economists.
The Trump administration has been in trade negotiations with China in the midst of a trade war between the world's two largest economies. The report said that U.S. trade deficit with China decreased 3.1 billion to $30.1 billion in February.
Exports to China increased $1.6 billion to $9.2 billion while imports decreased $1.5 billion to $39.3 billion. America's deficit with Japan, however, increased $1.3 billion to $6.7 billion in February. Exports to Japan decreased by $1.1 billion to $5.7 billion while imports increased $200 million to $12.4 billion.
The U.S. had hit China with about $250 billion worth of tariffs on Chinese goods last year coming into the U.S. China responded with tariffs on U.S. goods.