- The Washington Times - Thursday, September 11, 2003


Record imports from China pushed America’s trade deficit higher in July, but U.S. exports also went up in a bit of good news for manufacturers that analysts said may also signal gains in the slumping economies of U.S. trading partners.

The Commerce Department’s latest snapshot yesterday of the country’s trade activity showed that the trade gap grew by 0.7 percent in July to $40.3 billion.

Imports of goods and services came to $126.5 billion in July, the second-highest level on record, and represented a 1.6 percent increase from June. As the United States’ economy strengthens, so have imports of foreign-made goods.

“U.S. consumers have almost an insatiable appetite for imported goods,” said Clifford Waldman, economist with Manufacturers Alliance/MAPI, a research group.

Improvement in sales of U.S.-made goods to other countries during the month, meanwhile, was a hopeful sign for the worldwide economic slump and “shows that the global situation is getting a tad bit better,” he said.

Exports totaled $86.1 billion in July, the strongest showing since May 2001, and marked a 2 percent increase from the previous month. A weaker U.S. dollar also is helping U.S. exports, making them less expensive to foreign buyers, economists said.

“Our exports improved solidly,” said Joel Naroff, president of Naroff Economic Advisors. “Sales of food, industrial supplies, capital goods and vehicles were all up.”

Separately, the Labor Department said new claims for unemployment insurance rose last week to a two-month high of 422,000. It suggested that cautious companies want to keep their work forces lean — discouraging news for job seekers, economists said.

On the trade front, the Bush administration believes the way to deal with rising trade deficits is for other countries to remove trade barriers. That would allow U.S. companies to do business more freely in overseas markets, thus boosting America’s global competitiveness, the administration says.

Critics say growing trade deficits are proof that the administration’s free-trade policies are not working. U.S. companies have moved operations overseas and imports are flooding into the United States, a situation that has resulted in hefty losses of American manufacturing jobs.

Manufacturers have lost nearly 16 percent of their work force, or 2.7 million jobs, in a record 37 straight months.

America’s politically sensitive trade deficit with China widened to a record $11.3 billion in July. Imports from the country totaled $13.4 billion, an all-time monthly high.

In a visit to China last week, Treasury Secretary John W. Snow pressed the administration’s case for letting China’s yuan trade freely on world markets.

U.S. manufacturers and other critics say China’s fixed-exchange rate is protectionist and that it makes goods produced in China less expensive on world markets and makes foreign imports too costly for Chinese consumers.

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