US Trade Deficit Swells to $48.8 Billion on China Gap
The trade deficit widened slightly more than expected in December, and the bilateral trade deficit with China last year soared to a record high $295.5 billion.
The monthly trade gap swelled to $48.8 billion as goods imports climbed to the highest level since July 2008, just before the financial crisis caused world trade to plunge, a report from the Commerce Department showed on Friday.
Analysts surveyed before the report had expected the December trade deficit at $48.0 billion, up from a revised estimate of $47.1 billion in November.
U.S. exports grew slightly in December, with records set for petroleum, services and advance technology goods.
For the year, the U.S. trade gap rose 11.6 percent to $558.0 billion, the highest since 2008.
Exports last year rose 14.5 percent to a record $2.1 trillion, keeping the United States on pace to meet President Obama’s goal of doubling exports in five years.
Imports grew 13.8 percent to a record $2.7 trillion, with records set in several categories.
Auto imports rose to the highest since 2007 and petroleum the highest since 2008. The average price for imported oil in 2011 was a record high $99.78 per barrel
The record trade deficit last year with China is certain to reinforce concerns in Congress about Beijing’s currency and trade practice ahead of a meeting next week between Obama and the Asian giant’s expected next leader, Vice President Xi Jinping.
U.S. exports to China jumped 13.1 percent to $103.9 billion. But that was overwhelmed by a 9.4 percent increase in imports from China, which pushed the tally to a record $399.3 billion.
Last year, the Democratic-controlled Senate passed legislation to pressure China to raise the value of its currency, but that bill hit a dead end in the Republican-controlled House of Representatives.
Many lawmakers believe that China deliberately undervalues its currency to give its companies an unfair price advantage, contributing to the huge bilateral deficit.
The U.S. trade deficits with the European Union and Canada also expanded in 2011.