The US trade deficit has expanded once again to the highest level in more than three years. This deficit rose 4.3% in February, according to the commerce department and was larger than Wall Street expectations. The deficit with China grew the most at 12.5% or $26.02 billion.
Mar 9, 2012 | 10:27AM
Ian Talley and Jeffrey Sparshott
NASDAQ
WASHINGTON -- The U.S. trade deficit expanded in January to its highest level in more than three years as exports to China and the debt-beleaguered euro zone plunged.
The U.S. deficit in international trade of goods and services rose 4.3% to $ 52.57 billion from $50.42 billion the month before, the Commerce Department said Friday. The December trade gap was originally reported as $48.80 billion.
The January deficit was larger than Wall Street expectations, with economists surveyed by Dow Jones Newswires having predicted a $48.4 billion gap.
The trade deficit with China surged 12.5% to $26.02 billion in January. Exports to the U.S.'s No. 2 trading partner fell 13.8% to $8.37 billion, while imports increased 4.7% to $34.40 billion. New data out of China shows the country's economy slowing more than expected, particularly as demand from Europe has fallen in the wake of its debt crisis.
The trade gap with the euro zone narrowed by nearly 11% to $7.61 billion as exports fell by $1.32 billion, but imports decreased by $2.23 billion.
The expanding trade gap with China will likely continue to fuel political action in Washington. Although Beijing has raised the value of the yuan against the dollar by around 40% since 2005, its currency is still deemed undervalued and an unfair competitive advantage by many U.S. businesses. And despite a measured uptick in trade filings against China, U.S. firms are also urging the Obama administration to take a more aggressive stance against a number of Beijing's economic and trade policies. The U.S. Senate early this week unanimously passed a bill allowing the Commerce Department to continue to apply nearly $5 billion in tariffs on imports, particularly those from China.
Friday's report showed that the average price of imported crude oil, a major driver of the trade deficit, fell slightly by 32 cents a barrel to $103.81 a barrel in January. The overall tab for crude imports was $28.10 billion, from $ 29.05 billion the month before. The U.S. paid $36.06 billion for all types of energy-related imports, up from $35.47 billion in December.
The real, or inflation-adjusted deficit, which economists use to measure the impact of trade on GDP, widened to $49.11 billion in January from $48.29 billion the month before.
January saw a record-high level of imports of goods in services, with expansions across the board, to a total of $233.37 billion. Imports of food, feed and beverages, capital goods, and autos and parts all recorded historical highs.
U.S. exports also rose, led by record levels for services, capital goods, and autos and parts. Total sales of goods and services abroad reached $180.81 billion.
The U.S. also registered an expanding deficit with major trade partner Canada, rising nearly 24% to $4.80 billion, the highest since October 2008. The trade gap with Japan fell by 5.4% to $6.19 billion while the deficit with Mexico decreased 14.3% to $4.24 billion.
The Commerce Department report on trade can be found at http:// www.census.gov/ft900.
-By Ian Talley and Jeffrey Sparshott, Dow Jones Newswires; 202-862-9285; ian.talley@dowjones.com
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