Trade deficit narrows slightly in September
Wednesday, November 10, 2010
WASHINGTON (AP) — The U.S. trade deficit narrowed slightly in September but was still running well above last year’s gap, adding urgency to Obama administration calls for other countries to do more to rebalance global growth.
The Commerce Department reported Wednesday that the deficit fell 5.3 percent to $44 billion in September, as imports retreated slightly while exports edged higher, helped by rising sales of American airplanes, computers and telecommunications equipment. The deficit was at $46.5 billion in August.
But even with the slight improvement in September, the U.S. deficit through the first nine months of this year is 40 percent higher than a year ago. The soaring trade deficits are coming at a time of high unemployment in the United States and have added pressure on Washington to do more to boost U.S. jobs.
For September, U.S. exports of goods and services edged up 0.3 percent to $154.1 billion, the highest level in two years. Imports, which had been surging in recent months, fell by 1 percent to $198.1 billion. The trade deficit is the gap between exports and imports.
The politically sensitive deficit with China, the country with the largest trade imbalance with the United States, dipped slightly to $27.8 billion in September. It had hit a monthly record of $28 billion in August.
Through the first nine months of this year, the trade gap with China is running 21 percent higher than in 2009 and is on track to match the all-time annual record set in 2008.
China reported this week that its trade surplus with the world surged in October to the second-highest level this year. That was expected to add to pressure on Beijing to ease currency controls that American manufacturers contend keep the Chinese yuan undervalued by as much as 40 percent against the dollar.
Through September, the overall U.S. trade deficit is running significantly higher than the pace set in 2009 when a deep recession had cut sharply into demand by U.S. consumers and businesses for foreign products.
The rising U.S. trade deficit has added to pressure on the administration and Congress to take action to protect American jobs from foreign competition. Much of the U.S. unhappiness has been aimed at China.
President Barack Obama arrived in South Korea on Wednesday for a meeting of the Group of 20 major industrial and emerging economies. The administration is pushing for the other countries to agree to set targets for current account trade balances as a way to rebalance growth. The administration has argued that surplus countries such as China, Germany and Japan need to do more to boost their domestic growth and not rely on exports to the United States.
But Obama found himself having to defend the decision announced last week by the Federal Reserve to pump an additional $600 billion into the U.S. banking system to try to jump-start a sluggish U.S. economy.
That action has triggered criticism from other countries who see it as an effort by the United States to weaken the value of the dollar to gain trade advantages. It renewed fears about the possible outbreak of a currency war in which countries will try to devalue their currencies as a way to bolster exports and offset weak domestic growth.
In a letter to the other G-20 leaders, Obama said, “When all nations do their part — emerging no less than advanced, surplus no less than deficit — we all benefit from higher growth.”
Use the comment form below to begin a discussion about this content.
Please review our Policies and Procedures before registering or commenting