Washington – The U.S. trade deficit shot up 12 percent in April to $56.96 billion, reflecting a surge in oil imports to the second highest level on record, the government reported today.
The Commerce Department said the new trade imbalance increased from a $53.56 billion deficit in March as imports rose 4.1 percent to a new record, swamping a 3 percent increase in U.S. export sales, which also set a record.
So far this year, the trade deficit is running at an annual rate of $686 billion, 11 percent higher than the record $617.58 billion deficit set for all of 2004.
Total imports rose to an all-time high of $163.38 billion in April, led by a 4.3 percent jump in petroleum imports to $19.4 billion, just below last November’s record. The average price for a barrel of crude oil imported during April hit a record high of $44.76 as global prices surged during the month.
Exports also rose to a record level of $106.42 billion in April, with sales of commercial aircraft, computer chips and industrial engines all posting big increases.
The soaring trade deficits have translated into a major political headache for President Bush as critics contend his trade policies have failed to protect American workers from unfair foreign competition, resulting in a string of record deficits and the loss of more than 3 million manufacturing jobs since mid-2000.
To counter these attacks, the administration has recently toughened its stance with China, where America has the biggest trade deficit, arguing that Beijing needs to scrap its fixed-rate currency system and crack down on the rampant piracy of American movies, music and computer programs.
The administration has also re-imposed quotas on various categories of clothing and textiles imports from China to protect U.S. manufacturers.
The tougher trade stance comes as the administration tries to overcome stiff opposition and win congressional approval of the Central American Free Trade Agreement covering six Latin American nations.
For April, the deficit with China rose 14 percent to $14.7 billion. So far this year, the deficit with China is running at an annual rate of $170 billion, surpassing last year’s record deficit of $162 billion with China, the highest ever recorded with any country.
This year’s increase with China has been propelled by a 51.7 percent rise in imports of textiles and clothing over the past four months, compared to the same period a year ago. This sharp increase has occurred with the lifting of a three-decade system of global quotas on Jan. 1.
American manufacturers have succeeded in getting the administration to re-impose quotas in several categories of clothing even though retailers contend this will drive up the price for American consumers.
The trade deficit with Canada rose to $5.4 billion in April, up 8 percent from the March, while the deficit with Mexico rose a smaller 3.3 percent to $4.4 billion.
The deficit with the 25-nation European Union edged down a slight 0.5 percent to $9.26 billion in April.
