- The Washington Times - Wednesday, March 20, 2002

America's trade deficit jumped to $28.5 billion in January as an improving U.S. economy boosted demand for foreign oil and other imports. At the same time, the global slump pushed American export sales to their lowest level in more than three years.
The Commerce Department said yesterday that the deficit in January was 15.4 percent higher than December's trade gap of $24.7 billion.
While last year's deficit narrowed slightly from the year before, the first improvement in six years, analysts said that the January report supported their belief that America's trade imbalance will widen again this year as the United States recovers faster from its recession than other nations. That allows Americans to buy imports sooner than foreigners can seek U.S. exports.
American manufacturers saw another problem the high-flying U.S. dollar, which has risen in value by 30 percent against other currencies since 1997. That makes U.S. exports more expensive on foreign markets while making the autos, televisions and other foreign goods that Americans crave cheaper.
David Huether, chief economist at the National Association of Manufacturers (NAM), said the big drop in exports underscored the problem manufacturers were facing from a "toxic combination of the overvalued dollar and weak growth abroad."
NAM has been pressuring the Bush administration to abandon the Clinton policy of insisting that a "strong dollar is in the best interests of the United States."
However, the current administration has refused to change from the past administration's unwavering support for a strong dollar, which not only keeps a lid on import prices but also supports a continued strong flow of foreign investment into U.S. markets.
For January, the widening in the trade deficit reflected the 0.1 percent drop in exports of goods and services, to $78 billion. Exports of goods alone fell a larger 0.2 percent to $54.8 billion, the lowest level since August 1998.
Some of the biggest export declines occurred in computers and computer accessories, down $426 million; telecommunications equipment, off $229 million; and industrial machinery, off $192 million.
Bucking the downward trend, exports of American farm products rose by $126 million to $4.2 billion, reflecting gains in sales of soybeans, fruit and corn. Exports of cars and auto parts were up by $166 million.
Imports of goods and services in January rose by a sharp 3.6 percent to $106.5 billion, with the change coming from a big rise in oil shipments and increases in demand for industrial supplies.
Oil imports were up by 11.1 percent to $6.5 billion. This increase reflected a rise in the volume of crude-oil shipments and the price per barrel, which rose by 80 cents to $16.31 in January.
America's largest deficit was with China, which has overtaken Japan as the perennial front-runner in this category. The January imbalance was $6.86 billion, an increase of 24.8 percent from the December level.

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