12:09 PM EDT, 04/03/2025 (MT Newswires) -- The US trade deficit narrowed more than projected in February as global trade tensions escalated after President Donald Trump announced sweeping new tariffs on its trading partners.

The goods and services deficit fell 6.1% to $122.66 billion from the previous month's revised figure, the Census Bureau and the Bureau of Economic Analysis reported Thursday. The consensus in a survey compiled by Bloomberg was for a deficit of $123.5 billion.

The US' goods trade deficit with China narrowed to $26.59 billion in February from a $29.69 billion shortfall the month prior. The goods trade gap with Japan shrank to about $5.2 billion from $7.4 billion.

The world's biggest economy saw a goods trade surplus of $3.37 billion with the UK in February, compared the previous month's shortfall of $509 million. The trade gap with the European Union widened to $30.88 billion from January's $25.45 billion, the official data showed.

Trump announced new tariffs on Wednesday, targeting imports from several countries including China and Japan. A 10% base tariff rate takes effect for all countries on April 5, though there will be additional duties that vary by country.

Trump set reciprocal tariffs of 34% on Chinese goods and 24% on Japanese items. The US will charge 20% duties on European Union items coming into the country and 10% on UK goods.

"Heightened trade uncertainty has already led consumers to tap the brakes, with households increasingly worried about inflation, employment, and income prospects," TD Economics said in a note on Wednesday. "The constant saber-rattling of tariff threats has also distorted trade flows, with imports surging in recent months as businesses try to front-run the tariffs."

Canada was spared from reciprocal tariffs and the baseline 10% rate, as prior duties remain in effect, TD said.

US imports in February held largely steady at about $401.12 billion, while exports increased 2.9% to $278.46 billion, the official data showed Thursday. Goods imports dropped to $328.93 billion in February from the previous month's $329.44 billion, while exports of goods rose to $181.94 billion from $173.62 billion.