Trade deficit narrowed to $43.6 billion in June

The U.S. trade deficit narrowed in June as exports hit the highest level in two years.

The Commerce Department said Friday that the trade gap slid 5.9% in June to $43.6 billion.

Exports of goods and services rose 1.2% to $194.4 billion, the highest amount since December 2014 on higher foreign demand for American soybeans, computer accessories and other products. Services exports reached a record $65.4 billion. Overall imports slipped 0.2% to $238 billion on a drop in demand for cellphones and other household goods.

So far this year, the trade deficit is up 10.7% to $276.6 billion.

The deficit means the United States is buying more goods and services from other countries than it is selling them. A shrinking trade gap boosts U.S. economic growth.

President Trump has vowed to bring down America’s trade deficits, saying they are caused by bad trade deals and abusive practices by China and other U.S. trading partners.

The deficit in goods with China rose 3.1% in June to $32.6 billion and is up 6.1% to $170.7 billion so far this year.

The goods deficit with Mexico slid 18.3% in June to $6 billion. The Trump administration is preparing to renegotiate the North American Free Trade Agreement with Mexico and Canada. Trump has complained that NAFTA encourages U.S. manufacturers to move to Mexico to take advantage of cheaper labor.