*NEWS*RECORD IMPORTS FUELS LARGER DEFICIT
*NEWS*RECORD IMPORTS FUELS LARGER DEFICIT
2003-11-13 at 9:27:00 am #8464Record Imports Fuel Larger Trade DeficitWASHINGTON (Nov. 13) -The U.S. trade deficit widened to $41.3 billion in September as imports climbed to an all-time monthly high, a fresh sign of Americans’ hearty appetite for foreign-made goods. Exports, however, also posted a solid gain.
The latest snapshot of the country’s trade activity showed that the trade gap grew by 4.4 percent in September from August’s $39.5 billion imbalance, the Commerce Department reported Thursday. September’s trade deficit was slightly larger than the $40.2 billion shortfall that economists were forecasting.
Imports of goods and services in September came to a record $127.4 billion, a 3.3 percent increase from the previous month. As the United States’ economy strengthens, so has Americans’ demand for foreign-made goods and services.
America’s politically sensitive deficit with China hit a record high in September as imports from the country surged, a development that could add to pressure in Congress to punish China for what critics contend are the country’s unfair trade practices.
Exports, meanwhile, totaled $86.2 billion in September, a 2.8 percent increase from August and the highest level since May 2001. A weaker U.S. dollar is helping exports, making them less expensive to foreign buyers. Improving economies abroad also contributed to stronger sales.
Separately, new claims for unemployment benefits rose by a seasonally adjusted 13,000 to 366,000 last week, the Labor Department reported. Even with the increase, the level of claims suggested that the labor market is stabilizing, economists said.
The trade report comes amid rising tensions on the global trading front.
The World Trade Organization ruled earlier this week that President Bush’s tariffs on imported steel are illegal, a decision that could lead to retaliatory tariffs on U.S. goods from some of the United States’ major trading partners.
WTO meetings in September aimed at a global trade deal collapsed after negotiators were unable to narrow the wide gap between rich and poor countries.
And, recent discussions between the United States and 15 other nations about creating a free-trade zone spanning the Western Hemisphere – a key economic goal of the Bush administration – failed to break an impasse. A larger gathering of trade ministers is expected to meet next week in Miami on the matter. Some analysts fear that meeting could end in failure.
The Bush administration believes the way to deal with widening trade deficits is for other countries to remove trade barriers. But critics argue that the trade deficits are proof that the administration’s free-trade policies are not working.
U.S. companies have moved operations overseas and imports are flooding into the United States, a situation that has resulted in heavy losses of American manufacturing jobs.
America’s trade deficit with China reached a record $12.7 billion in September as imports totaled $14.8 billion, an all-time monthly high.
U.S. manufacturers complain that China’s fixed-exchange currency rate is protectionist and makes goods produced in China less expensive on world markets and makes foreign imports too costly for Chinese consumers. To turn this situation around, the administration has been pressing Beijing to let its currency trade freely on world markets.
In a buying spree aimed at easing trade tensions with the United States, China agreed Wednesday to purchase commercial airplanes and jet engines from U.S. companies. The agreements came in connection with prodding by Commerce Secretary Don Evans, who in a recent trip to China warned that the country had to take greater steps to open its markets.
Meanwhile, the Big Three automakers in the United States also announced trade deals allowing them to export thousands of cars to the country.
Thursday’s report also showed the U.S. trade deficit with Japan widened to $5.1 billion in September, up from $4.8 billion in August. America’s deficit with Canada climbed to $5.2 billion in September, the highest level since January 2001.