The US trade deficit narrowed last year for the first time in six years, as rising exports supported by a weak dollar helped offset a record gap with China, data showed on Thursday.
The trade gap fell to US$711.6 billion from US$758.5 billion in 2006, the US Commerce Department reported.
Blighting the improved trade picture was a persistently high deficit with China, which once again sparked outrage over Beijing's alleged currency manipulation and the loss of US manufacturing jobs.
Last year's 6.2 percent decline in the deficit followed five consecutive years of record peaks and was caused mainly by feeble US economic growth and a declining dollar that blunted demand for imports.
It marked the biggest reduction in the trade deficit since 1991, when the US economy was also slowing, and narrowed the trade gap to 5.1 percent of GDP last year from 5.7 percent in 2006.
Exports of US goods and services shot up 12.2 percent from 2006 to US$1.62 trillion, while imports climbed a more modest 5.9 percent to US$2.33 trillion.
Foreign demand
"The rise in exports indicates that foreign demand for US goods remains robust, while import weakness reflects soft US domestic demand and the lower value of the US dollar," said Peter Kretzmer, senior economist at Bank of America.
Economists expect that sluggishness in the US economy, mired in the worst housing slump in several decades and a credit crunch, will drag down global growth, thus reducing demand for US exports despite the dollar's weakness.
"US domestic demand is weakening further but activity was boosted by global demand. How long that will last for is the question," said Andrew Busch, an analyst at BMO Capital Markets.
Relief on the trade front allayed some recession fears. The government has taken a series of monetary and fiscal steps since the subprime, or high-risk, mortgage crisis flared in August, to boost GDP growth that slowed to a 0.6 percent crawl in the fourth quarter.
The Fed has slashed interest rates and on Wednesday US President George W. Bush signed a US$168 billion stimulus package to ward off recession.
"The narrowing of the US trade deficit is providing a valuable offset to the US's slower rate of domestic spending, thereby helps to keep the US out of a recession," John Lonski, chief economist at Moody's Investors Service, told reporters.
But critics pointed to the ballooning trade deficit with China, which jumped 10.2 percent last year to a record US$256.3 billion as Americans snatched up cheap Chinese-made goods. They claim China is keeping its yuan currency undervalued to maintain an illegal trade advantage.
Auggie Tantillo, the head of the American Manufacturing Trade Action Coalition, a lobby group for various industries, warned: "Swift action from Congress is needed to stanch the hemorrhaging of US manufacturing jobs lost to predatory imports from China."
December surprise
The trade deficit in December narrowed to US$58.8 billion from a virtually unrevised US$63.1 billion in November, beating market expectations of US$61.5 billion.
The decline came on a 1.5 percent rise in exports, to US$144.3 billion, and a 1.1 percent fall in imports, to US$203.1 billion, mainly in auto imports.
The average price of an imported barrel of oil was up 3.9 percent, helping produce record total petroleum imports of US$36 billion, about half the monthly deficit.
In exports, a US$1.9 billion increase was driven by a US$1.4 billion rise in civilian aircraft deliveries, mainly by Boeing.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique