After widening sharply in March, the US trade deficit narrowed again in April. The trade deficit narrowed from a revised $52.6 billion to $50.1 billion, while the consensus was looking for a drop to $49.5 billion. Excluding petroleum, the trade deficit narrowed too, from $23.99 to $22.07. The details are however less encouraging as both imports (-1.7% M/M) and exports (-0.8% M/M) weakened in April after reaching record high levels in the previous month. Not only exports to Europe are slowing sharply, but even more are exports to China. The decline in imports is only partly due to a decline in oil imports, while imports of capital goods, industrial supplies and materials dropped sharply. Despite the sharp drop in the trade deficit, a quick calculation suggests that for now it is not (yet) having a positive impact on GDP growth in the second quarter. The trade deficit in April is still higher than the average deficit in the first quarter.