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News of the worsening trade deficit comes as the United States and China are embroiled in tit-for-tat tariffs which have rattled global financial markets.

The US trade deficit has stretched to its widest point in nearly a decade despite President Trump's attempts to eliminate it with an "America First" strategy.

The president views trade deficits as a sign of economic weakness and as the result of bad trade agreements and unfair practices by America's trading partners.

Regionally, Canada's trade surplus with the United States narrowed to $2.6 billion in February compared with $2.9 billion in January, as imports from the US grew 3.3%.

The Commerce Department said Thursday that the trade gap - the difference between what America sells and what it buys in foreign markets - widened to $57.6 billion in February from $56.7 billion in January.

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Year-to-date, the goods and services deficit increased $21.1 billion, or 22.7 percent, from the same period in 2017. The deficit with Mexico surged 46.6 percent in February.

The broadening gap comes as President Donald Trump pursues an increasingly fraught battle with the world's largest economies to right the yawning United States trade imbalance, sparking fears of a trade war. "In 2019, the tax legislation and budget deal will boost the federal deficit by $480 billion, boosting the trade deficit by $161 billion".

The rising trade gap was also due to weigh heavily on growth at the start of the year because deficits subtract from calculations of GDP. Still, the so-called real trade deficit is above the fourth-quarter average of $66.81 billion.

The central bank has raised its benchmark interest rate three times since July to 1.25 percent but has anxious about a number of uncertainties, including the impact of past rate hikes on highly indebted Canadians and the outlook for trade.

The value of exports climbed by 1.7% to USD204.4 billion in February, reflecting notable increases in exports of industrial supplies and materials, passenger cars, and consumer goods. Imports increased $43.6 billion or 9.1 percent. Aircraft and other transportation equipment and farm, fishing and intermediate food products also recorded decent rises, while metal ores and non-metallic minerals provided some offset.