U.S. trade deficit falls to $50.15 billion, reflecting rebound in exports and drop in oil prices
Friday, September 10th 2004, 9:16 am
By: News On 6
WASHINGTON (AP) _ The U.S. trade deficit fell to $50.15 billion in July as American exports of cars, airplanes and computers rose while imports declined for the first time in nearly a year, reflecting a drop in the country's foreign oil bill. The politically sensitive deficit with China hit an all-time high.
The Commerce Department reported Friday that the 8.9 percent improvement in the deficit in July followed a 16.9 percent surge in June which had pushed the trade gap to a record $55.02 billion. Nevertheless, the $50.15 red-ink figure was the second highest imbalance on record.
Even with the slight narrowing, the trade deficit through July is running at a record annual rate of $581 billion, putting the country on track to surpass last year's all-time high deficit of $496.5 billion.
The country's exploding trade deficit has become an issue in the presidential race with Democratic challenger John Kerry contending that President Bush has not done enough to protect American workers against unfair competition from low-wage nations with poor records on labor rights and environmental protection.
Kerry singles out China as the chief culprit in that regard. The new report showed that America's deficit with China hit a new monthly record of $14.9 billion, leaving the imbalance with China so far this year 28 percent above last year's level. The U.S. deficit with China hit $124.1 billion last year, the largest imbalance ever suffered with a single country.
Critics contend that the Bush administration has not done enough to force China to open up its markets to U.S. exports of manufactured goods and farm products or to pressure the Chinese to stop managing its currency in such a way that it gives Chinese products an estimated 40 percent price advantage over U.S. goods.
The administration on Thursday rejected a request from a coalition of businesses and labor unions that it pursue an unfair trade case against China over the currency issue.
The administration said its diplomatic efforts to lobby China to change its currency policy were beginning to show results. But Kerry slammed the decision as another example of Bush's failure to stand up for American workers.
U.S. exports of goods and services rose by a solid 3 percent last month to $95.86 billion, reflecting strong gains in shipments of autos and auto parts, civilian aircraft and computers. Shipments of American farm products actually fell by 0.5 percent in July to $4.47 billion, led by declines in shipments of soybeans and wheat.
Imports, which had risen for 10 straight months, finally retreated slightly, falling 1.4 percent to $146 billion, still the second highest level of imports on record.
The decline reflected a 9.4 percent drop in imports of crude oil and other petroleum products, which fell $13.75 billion. It also involved a drop in both the volume of imports and the price as the average price of crude oil edged down to $33.28 per barrel from $33.76 in June. It was the first drop in price in nine months.
However, analysts cautioned that prices were likely to show further increases in coming months, reflecting record prices set in August trading.
In addition to China, the United States also set a deficit record with Germany, an imbalance of $4.3 billion. The U.S. deficit with all of Western Europe rose to $11.1 billion, the second highest level on record.
America's deficit with Canada, the country's largest trading partner, edged down a bit to $6.11 billion, compared to $6.58 billion in June. The U.S. deficit with Mexico, its other partner in the North American Free Trade Area, fell to $3.54 billion, compared to $4.9 billion in June.