After five years of record trade deficits, there are tentative signs that things are about to turn. Strong export growth narrowed the gap from $61.5 billion in December to $59 billion in January. The strong export performance was mainly driven by sales of aeroplanes, computers and agricultural products, especially soybeans and wheat. Meanwhile, US shoppers have finally begun to look at their credit card bills and held back spending on foreign cars, toys and television sets.

While the US trade performance might be improving, the bilateral deficit with China is still rising. Spurred on by unfair trade practices and an undervalued Yuan, the trade gap with China increased by 12 percent to $21.2 billion. Chinese goods now accounts for a third of the US trade deficit.