U.S. Trade Deficit Widens

The U.S. trade deficit rose by a few billion dollars more than had been anticipated in March. Imports rose 4.5% to $190.1 billion, but at the same time exports increased 1.8% to $126.2 billion. The $8.2 billion rise in imports achieved a new record.

"Higher monthly trade deficit numbers pour more fuel on the fire burning under this administration to really do something on trade policy, especially when it comes to trade with China," go the words of Senator Charles Schumer, a Democrat who represents the state of New York.

Although the U.S. trade deficit with commercial competitor China shrunk due to a significantly increased amount of U.S, trade goods sold in that nation, the trade deficit on the whole widened for the United States. This was largely due to the rise in oil imports in the month of March. The United States set a record for the number of exports sold to China in March, and as a result the country's trade deficit with China fell by 6.4% to a real total of $17.2 billion, which is the lowest deficit with China that the U.S. has had since May of last year. Nevertheless, the trade deficit with China is up 20.4% over the same time last year as measured by the records of the first quarter of 2007. At the close of last year, the U.S. trade deficit with China had escalated to a historical record high of $232.5 billion.

The trade deficit is now close to $64 billion, significantly larger than expected by market researchers and economists. The gap between what the United States imports from other nations and what it sells to the rest of the planet rose 10.4% from its February level, according to the U.S. Commerce Department.

One area of sharp focus concerning the trade deficit is automotives. Peter Morici, a professor at the University of Maryland School of Business, says, "Japanese and Korean manufacturers have captured larger market shares by offering more attractive and reliable vehicles than U.S. competitors, and are expanding their U.S. production. However, Asian manufacturers tend to use more imported components than domestic companies, and GM and Ford are pushing their parts suppliers to move to China."