The overall U.S. trade deficit fell slightly in June as both imports and exports declined amid escalating trade tensions, suggesting the Trump administration’s "America First" policies were restricting trade flows.

The U.S. goods and services deficit was 55.2 billion U.S. dollars in June, down by 0.3 percent from the revised 55.3 billion dollars in May but higher than economists' expectation for 54.6 billion dollars, according to the U.S. Commerce Department.

U.S. exports in June fell to 206.3 billion dollars, 4.4 billion dollars less than in May, while imports dropped to 261.5 billion dollars, down 4.6 billion dollars from the previous month, suggesting that trade tensions were curtailing trade flows.

Goods trade deficit with China decreased

The goods trade deficit with China decreased 0.8 percent to 30.0 billion U.S. dollars, with imports falling 0.7 percent. Exports to China were unchanged in June. 

The U.S.-China trade tensions have caused wild swings in the trade deficit, with exporters and importers trying to stay ahead of the tariff fight between the two economic giants.

But U.S. H1's trade deficit increased 

While the Trump administration has tried to shrink the trade gap by imposing tariffs on various imports, the U.S. goods and services deficit increased 23.2 billion dollars in the first six months of the year, or 7.9 percent, from a year earlier.

Economists at the International Monetary Fund said earlier that America's persistent deficit with its trading partners resulted from its macroeconomic policy, urging it to adopt fiscal consolidation and implement structural policies to address external imbalances, instead of resorting to distorted trade actions.

(With input from Xinhua News Agency)