WASHINGTON, Jan 7 (Reuters) - The U.S. trade deficit fell to a more than three-year low in November as imports declined further, likely weighed down by the Trump administration’s trade war with China, and exports rebounded, suggesting the economy ended 2019 on solid footing.

FILE PHOTO: Shipping containers are seen at the Port Newark Container Terminal in Newark, New Jersey, U.S. on July 2, 2009. REUTERS/Mike Segar/File Photo

The Commerce Department said on Tuesday the trade deficit decreased 8.2% to $43.1 billion, the smallest since October 2016. The percentage drop was the largest since January.

The trade deficit has narrowed 0.7% through November and is on track to record its first annual decline since 2013. While the shrinking trade bill should provide a boost to gross domestic product in the fourth quarter, falling consumer goods imports also suggest a cooling in domestic demand.

Data for October was revised to show the trade gap declining to $46.9 billion instead of the previously reported $47.2 billion. Economists polled by Reuters had forecast the trade gap narrowing to $43.8 billion in November.

The goods trade deficit with China, the focus of the White House’s “America First” agenda tumbled 15.7% to $26.4 billion, with imports dropping 9.2% and exports jumping 13.7%. The goods trade gap with the European Union fell 20.2% to $13.1 billion.

The United States and China are embroiled in a bruising trade war, and Washington has also tussled with other trading partners, including the European Union, Brazil and Argentina, accusing them of devaluing their currencies at the expense of U.S. manufacturers.

Though Washington and Beijing in December hammered out a “Phase 1” trade deal, considerable confusion remains about the details of the agreement. President Donald Trump said last Tuesday that the partial deal would be signed on Jan. 15 at the White House.

The 18-month-long U.S.-China trade war has undermined business investment, which together with slowing growth overseas have led to a recession in manufacturing. Economists expect manufacturing to continue to struggle without a complete rolling back of tariffs.

When adjusted for inflation, the goods trade deficit decreased $3.7 billion to $75.3 billion in November, the smallest since March 2017. The so-called real trade deficit so far in the fourth quarter is below the average for the July-September period. Economists expect trade will add at least 1.5 percentage points to GDP growth in the fourth quarter after being a drag for two straight quarters.

The Atlanta Federal Reserve is forecasting GDP increasing at a 2.3% annualized rate in the fourth quarter. The economy grew at a 2.1% pace in the third quarter.

In November, goods imports dropped 1.4% to $201.1 billion, declining for a third straight month. Consumer goods imports fell $1.0 billion, pulled down by declines in cellphones and other household items, and artwork and other collectibles.

Economists believe consumer goods imports were weighed down by a 15% tariff on $110 billion worth of Chinese goods that came into effect on Sept. 1. They also say anticipation that the “Phase 1” trade agreement would roll back the tariffs could have encouraged companies to hold off on imports.

The drop in consumer goods imports points to a slower pace of consumer spending in the October-December quarter after two straight quarters of brisk growth.

Capital goods imports dropped $1.2 billion in November, reflecting decreases in civilian aircraft and computers. Crude oil imports tumbled to 166.4 million barrels, the lowest since February 1992, from 188.3 million barrels in October. Motor vehicle and parts imports, however, rose $1.1 billion.

Goods exports rose 0.7% to $137.2 billion in November. They were boosted by a $0.6 billion increase in shipments of capital goods. Consumer goods exports advanced $0.5 billion.

The goods trade deficit in November was the smallest since October 2016. The petroleum surplus of $0.8 billion in November was the highest on record.