Trade deficit swells 9% to $46 billion in March
By Barbara Hagenbaugh
USA Today
Associated Press
WASHINGTON — The trade deficit jumped to a record in March as U.S. companies and consumers bought more foreign-produced oil, computers, TVs, shoes and other goods, the government said yesterday in a report that provided further evidence of a stronger economy.
Cargo containers are piled high at the Los Angeles Port. The trade deficit hit a record high of $46 billion in March, with the trade gap with China reaching $10.4 billion.
The trade deficit — the difference between imports and exports — widened 9 percent to a record $46 billion in March, the Commerce Department said.
Exports in March rose 2.6 percent to a record $94.7 billion, suggesting that U.S. companies are having success selling their products abroad as the world economy picks up steam. Telecommunications equipment, boats and semiconductors were among the U.S. items posting strong sales increases abroad.
Imports rose 4.6 percent to $140.7 billion, also a record. Oil imports surged to 10.7 million barrels a day, up 7.8 percent from February and the fastest pace since July.
The surge in imports suggests that U.S. consumers and businesses are feeling more optimistic about the economy, says Economy.com's David Ingram. But Ingram and other economists predict exports won't be able to keep up with the flood of imports.
"The U.S. economy is firing on all cylinders and is absorbing a great deal of resources from abroad," Ingram said in a report. "Foreign demand is less uniform, and, due to globalization, is more frequently satisfied by foreign production. Thus, export growth does not keep up with import growth during a period of rapid U.S. expansion."
The large trade deficit, more than 4 percent of the United State's $11 trillion gross domestic product, has long drawn the attention of some economists who worry about dependence on foreign goods and investment.
Sen. John Kerry of Massachusetts, the presumed Democratic presidential nominee, pointed to the import influx and criticized the Bush administration for not being tough on foreign competitors.
Bush has defended his trade record, pointing to trade agreements with a number of countries.
The deficit with China jumped to a record $10.4 billion in March, up 26 percent from February and up 36 percent from March 2003.
U.S. business owners have complained that China's practice of tying its currency to the U.S. dollar is unfair. Because the Chinese currency is tied to the dollar, Chinese firms enjoy the same advantages of the cheapened dollar as their U.S. counterparts in the international marketplace.
The Bush administration has leaned on Chinese policymakers to let their currency float, thus far without success.
