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Trade deficit stays close to record, foreign oil bill highest ever
Martin Crutsinger AP Economics Writer
America’s trade deficit declined slightly to $33.2 billion in October but was still the second-highest on record. Imbalances with China and Japan both hit all-time highs, reflecting imports of autos and Christmas toys, and America’s foreign oil bill also rose to the highest level ever.
The Commerce Department reported DEC. 19 that the October trade deficit represented a 1.6 percent decline from the record high of $33.7 billion set in September.
Through the first 10 months of the year, the trade deficit is running at an annual rate of $363 billion, almost $100 billion higher than last year’s $265 billion deficit. Clinton hopeful But the departing Clinton administration and some private economists saw glimmers of hope that the soaring imbalances may begin to turn around in the new year as the U.S. economy slows and foreign economies rebound.
“With the U.S. slowdown looking more real every day, the trade deficit may have passed its peak”’ said Bill Cheney, chief economist at John Hancock Financial Services in Boston.
The administration insisted that the trade deficit represented the impact of larger economic forces — fast growth in the United States and sluggish growth overseas — rather than a failure of President Clinton’s open-trade policies.
“While the trade deficit remains very high, the evidence suggests that the upward pressures on this deficit may be easing as growth moderates in this country and gathers strength in other parts of the world,” Commerce Undersecretary Robert Shapiro told reporters.
But critics contended that Clinton’s insistence on pursuing free trade policies had left U.S. workers vulnerable to unfair competition from countries with low wages and lax environmental regulations. Some said President-elect Bush was likely to take the same route.
Advocates of free trade, including Clinton and Bush, argue that in an era of increasing globalization, America has no choice but to push for trade liberalization, which benefits U.S. consumers and opens foreign markets for American exporters. Crude imports hit $8.5 billion October imports continued to feature a high level of oil shipments. Imports of crude petroleum hit an all-time high of $8.5 billion in October as the volume rose even as the price-per-barrel dipped slightly to $28.62 from a 10-year high of $28.98 in September.
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