March 11, 2005
U.S. Trade Deficit Hits $58.3 Billion as Chinese Imports
By ELIZABETH BECKER
ASHINGTON, March 11 - The United States trade deficit hit $58.3
billion, its second-highest level on record in January, defying
predictions that a weakened dollar and lower oil prices would improve
the American trade picture.
Instead, American consumers continued to buy foreign-made goods at a
record pace, including cars, electronics and business equipment,
helping to increase the trade deficit by 4.5 percent from $55.7 billion
in December, the Commerce Department reported today.
This month's trade figures also included a surge in Chinese textile and
apparel shipments, reflecting the end to global quotas and the
beginning of what eventually led to China taking over as much as 70
percent of the American textile and apparel market.
The Bush administration said these trade figures should be seen as
testimony to the strength of the American economy and its role as an
engine of global growth.
"We view these figures as an affirmation that we're growing faster than
our trading partners by as much as 2 percent and we need them to take
steps so they can grow and buy our products," Rob Nichols, the
spokesman for Treasury Secretary John W. Snow, said in an interview.
Representative Benjamin L. Cardin of Maryland, the ranking Democrat on
the trade subcommittee of the House Ways and Means Committee, was far
less sanguine. He said he would push for immediate action, beginning
with implementing safeguards to limit Chinese textile goods. Those
limits, initially approved by the administration, are blocked by a
"We are obviously in a free fall here, with deficit after deficit, and
it just cries out for action," Mr. Cardin said in an interview.
But China is also pushing along the global economy, spurring growth
especially in Asia.
Yet while most other industrialized countries enjoy a trade surplus
with China, the United States has a trade deficit of $15.3 billion with
the Asian giant, the largest deficit with a single country on record.
China accounted for one-fourth of the trade shortfall in January.
That imbalance has led to increasing loud charges of unfair trading
practices by China, from hidden subsidies to undervaluing its currency.
Those issues are rising in the political agenda as the trade deficit
Representative Clay Shaw, the Republican from Florida who heads the
trade subcommittee of the House Ways and Means Committee, said in an
interview that he planned to hold hearings on the trading practices of
"China is one of my top priorities," Mr. Shaw said. "We need to be
concerned about China and some of their tactics."
As bad as the trade figures were for January, some analysts say the
imbalance will grow in the near term.
"Most ominously, matters should get worse because of the jump in oil
prices in February," said Ashraf Laidi, the chief currency analyst at
the M.G. Financial Group in New York, who predicted that next month's
deficit could reach $62 billion, surpassing November's record trade gap
of $59.3 billion.
Analysts had hoped that lower imported oil prices in January would help
diminish the trade imbalance. The Commerce Department said the average
price of imported oil was $35.35 a barrel in January, the lowest since
The weakened dollar had been expected to spur export growth, which it
did by 0.4 percent, but not enough to offset the import growth of 1.9
percent. The dollar continued to weaken today, falling in value against
the euro and other foreign currencies after the January trade deficit
Over all in January, American exports rose $400 million, to $100.8
billion, mostly because of an increase in sales of services, the
Commerce Department said. But imports rose $2.9 billion, to $159.1
billion, in January, with much of the money being spent on automobiles
and automobile parts, the department said.