Sun, Jun 12, 2005 - Page 10 News List

Oil, imports drive up US trade deficit

POLITICAL HEADACHEThe US trade imbalance increased to US$56.96 billion in April as imports rose 4.1 percent to a new record, swamping the increase in export sales


An unidentified motorist pumps unleaded gas, which was selling for US$2.09 a gallon, at a Gulf gas station in Somerville, Massachusetts, on Thursday. The US trade deficit shot up to US$56.96 billion in April, reflecting a surge in oil imports to the second-highest level on record, the government reported on Friday.


The US trade deficit shot up 6.3 percent in April to US$56.96 billion, reflecting a surge in oil imports to the second-highest level on record, the government reported on Friday.

The US Commerce Department said the new trade imbalance increased from a US$53.56 billion deficit in March as imports rose 4.1 percent to a new record, swamping a 3 percent increase in US export sales, which also set a record.

So far this year, the trade deficit is running at an annual rate of US$686 billion, 11 percent higher than the record US$617.58 billion deficit set for all of last year.

Total imports rose to an all-time high of US$163.38 billion in April, led by a 4.3 percent jump in petroleum imports to US$19.4 billion, just below last November's record. The average price for a barrel of crude oil imported during April hit a record high of US$44.76 as global prices surged during the month.

Exports also rose to a record level of US$106.42 billion in April, with sales of commercial aircraft, computer chips and industrial engines all posting big increases.

The soaring trade deficits have translated into a major political headache for US President George W. Bush as critics contend his trade policies have failed to protect US workers from unfair foreign competition, resulting in a string of record deficits and the loss of more than 3 million manufacturing jobs since mid-2000.

To counter these attacks, the administration recently toughened its stance with China, where the US has the biggest trade deficit, arguing that Beijing needs to scrap its fixed-rate currency system and crack down on the piracy of US movies, music and computer programs.

The administration has also re-imposed quotas on various categories of clothing and textiles imports from China to protect US manufacturers.

The tougher trade stance comes as the administration tries to overcome stiff opposition and win congressional approval of the Central American Free Trade Agreement covering six Latin American nations.

For April, the deficit with China rose 14 percent to US$14.7 billion. So far this year, the deficit with China is running at an annual rate of US$170 billion, surpassing last year's record deficit of US$162 billion with China, the highest ever recorded with any country.

The trade deficit with Canada rose to US$5.4 billion in April, up 8 percent from the March, while the deficit with Mexico rose a smaller 3.3 percent to US$4.4 billion.

The deficit with the 25-nation EU edged down a slight 0.5 percent to US$9.26 billion in April.

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