FILE - In this April 27, 2019, file photo, Chinese President Xi Jinping waves as he arrives for a press conference at the closing of the Belt and Road Forum at Yanqi Lake on the outskirts of Beijing. The tariff war between Washington and Beijing poses one of the biggest challenges yet for Chinese President Xi Jinping, potentially exposing his political vulnerabilities at a time when the Chinese economy is already slowing. (AP Photo/Mark Schiefelbein, File)

FILE - In this April 27, 2019, file photo, Chinese President Xi Jinping waves as he arrives for a press conference at the closing of the Belt and Road Forum at Yanqi Lake on the outskirts of Beijing. The tariff war between Washington and Beijing poses one of the biggest challenges yet for Chinese President Xi Jinping, potentially exposing his political vulnerabilities at a time when the Chinese economy is already slowing. (AP Photo/Mark Schiefelbein, File)

WASHINGTON (AP) — The U.S. trade deficit increased slightly in March, even though the deficit with China fell to the lowest point in five years.

The deficit in goods and services edged up 1.5% to $50 billion in March after falling 3.6% in February, the Commerce Department reported Thursday. The deficit is the difference between what America sells to the rest of the world and what it imports.

Exports rose 1% to $212 billion in March while imports rose a slightly faster 1.1% to $262 billion.

The deficit in goods with China dropped 16.2% to $20.7 billion, the lowest level since March 2014.

ADVERTISEMENT

Paul Ashworth, chief U.S. economist for Capital Economics, said that about one-fourth of the improvement in U.S. exports came from increased sales of American soybeans, which he said would be put “at risk of being reversed if the (U.S.-China) trade talks collapse amid acrimony and higher tariffs.” China is a major buyer of U.S. soybeans.

The United States and China have been locked in a trade war for the past year with a new round of U.S. tariffs scheduled to go into effect Friday. Negotiators from both countries are scheduled to meet Thursday and Friday in Washington for an 11th round of talks aimed at reaching an agreement to ease economic tensions between the world’s two biggest economies.

On Sunday President Donald Trump expressed frustration with what the U.S. side saw as backsliding by Chinese negotiators. Trump has said tariffs will be raised on $200 billion in Chinese products from 10% to 25% starting Friday. Chinese officials have said they will retaliate with higher tariffs on U.S. goods.

The new trade report showed that the deficit with China for the first three months of this year totals $80 billion, still the largest with any country but down 12.2% from the same period a year ago.

The deficit with Mexico jumped to $9.5 billion in March, the highest on record, while the deficit with Canada was unchanged at $1.4 billion.