The Commerce Department says the deficit plummeted 16.9 per cent to $35.4 billion in February, down from $42.7 billion in January.

The sharp decrease reflects a $10.2 billion drop in imports since January, likely due to cheaper oil prices and a since-resolved West Coast ports dispute that interrupted the flow of 20 per cent of the nation's imports. The impact of that dispute was seen in sharp declines in imports from China and Japan, causing the trade deficit with both countries to fall.

Exports also tumbled because a strengthening dollar has caused American-made goods to be more expensive abroad.

Economists expect the deficit to widen further in 2015, as a growing U.S. economy should fuel demand for imports.