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The deficit fell 8.2 percent to $43.1 billion, the smallest since October 2016, the Commerce Department said Tuesday. It was down 0.7 percent through the first 11 months of the year and is on track for its first annual decline since 2013.
Exports to China spiked 13.7 percent as imports fell by 9.2 percent, pushing the U.S.' trade deficit with China down by 15.7 percent to $26.4 billion. The trade deficit with the European Union narrowed by 20.2 percent $13.1 billion. President Trump has long referred to the trade balance as a scorecard of sorts for how the trade war is progressing.
The U.S. and China reached a partial trade deal on Dec. 12 after a more than 21-month-long trade battle.
A Chinese delegation is expected to arrive in Washington on Jan. 13 with a signing scheduled to take place two days later at the White House. Trump has said a comprehensive deal could be done in two or three parts.