US trade deficit grows

The US trade deficit surged to another record in January as the country's foreign oil bill rose sharply, auto imports rose and Americans' taste for imported wines helped increase the deficit in food products.

    The US foreign oil bill rose sharply

    The politically sensitive imbalance with China also rose, reflecting a flood of Chinese cell phones and clothing.

    The Commerce Department reported that the deficit jumped by 5.3% in January to an all-time high of $68.5 billion. The worsening of the deficit exceeded analysts' expectations and was certain to provide ammunition for critics of the trade policies of George Bush, the president.

    Those critics contend that Bush's pursuit of free trade agreements around the world has exposed American workers to unfair competition from low-wage countries that has contributed to the loss of nearly three million American manufacturing jobs in recent years.

    Ports controversy

    Critics say the US decision over 
    ports endangers national security

    Unhappiness with foreign competition was heightened in recent weeks with the revelation that the administration had approved the sale of operations at six US ports to a state-owned company in the United Arab Emirates.

    Opponents, arguing that the sale would represent a serious security threat, have moved to overturn that decision in Congress.

    America'

    s trade deficit hit a record of $723.6 billion for all of 2005, and many economists believe this year's imbalance will be worse. The $68.5 billion January deficit in trade in goods and services surpassed the old monthly record of $67.8 billion set last

    October.

    For January, US exports of goods and services rose 2.5% to an all-time high of $114.4 billion. But this increase was swamped by a 3.5% rise in imports which also set a record at $182.9 billion. The trade deficit is the difference between what America imports and what it sells abroad.

    The rise in imports reflected a 4.3% increase in America's foreign oil bill, which climbed to $24.6 billion as an increase in crude oil prices offset a drop in the volume of shipments. The average per barrel price for crude oil rose to $51.93, up from $49.76 in December.

    Foreign barriers

    The US is seeking to lower foreign
    barriers to its exports 

    Imports of foreign cars and auto parts rose by 5.6% to $22.7 billion. Imports of computers and consumer goods were also up. Demand for foreign food products climbed by 6.2% to $6.4 billion, reflecting increased demand for wine and other food products.

    The Bush administration contends that the country's huge trade deficits primarily reflect the fact that the US economy has outperformed the rest of the world in recent years, boosting domestic demand while American exporters have had to battle weak demand overseas.

    The administration is seeking to strike free trade agreements with countries around the world as a way to lower foreign barriers to US exports.

    But critics charge these deals open American workers to unfair competition from low-wage countries

    .

    SOURCE: Agencies


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