- The Washington Times - Saturday, January 12, 2008


The U.S. trade deficit in November rose to the highest level in 14 months, reflecting record foreign crude oil prices. The deficit with China declined slightly while the weak dollar boosted exports to another record high.

The Commerce Department reported that the trade deficit, the gap between imports and exports, jumped 9.3 percent to $63.1 billion. The imbalance was much larger than the $60 billion that had been expected.

The increase was driven by a 16.3 percent increase in America’s foreign oil bill, which climbed to a record $34.4 billion. With oil prices last week touching $100 per barrel, analysts are forecasting higher oil bills in future months.

Ian Shepherdson, an analyst at High Frequency Economics, noted that the deficit was also pushed higher by a big drop in exports of commercial aircraft. He said that setback is likely to be only temporary given the orders backlog that Boeing must fill to meet global demand.

The big jump in oil prices pushed total imports of goods and services up by 3 percent to a record $205.4 billion. Exports also set another record, rising by a smaller 0.4 percent to $142.3 billion. Export demand has been growing significantly over the past two years as U.S. manufacturers and farmers have gotten a boost from a weaker dollar against many other currencies. That makes U.S. goods cheaper on overseas markets.

Through the first 11 months of 2007, the deficit is running at an annual rate of $709.1 billion, down 6.5 percent from the record $758.5 billion a year earlier. Analysts think that the export boom will finally result in a drop in the trade deficit after it set records for five years in a row.

Critics of President Bush’s trade policies, however, say the declining deficits will still leave the imbalance at a painfully high level, which they contend reflects unfair trade practices of other nations that have contributed to the loss of more than 3 million U.S. manufacturing jobs since 2000. Trade is expected to be a key issue in this year’s presidential campaign.

Much of the unhappiness is focused on China, where the U.S. trade deficit through the first 11 months of 2007 totals $237.5 billion, the highest annual imbalance ever recorded with a single country — with December still left to tally.

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