WASHINGTON (AP) – A big jump in imported oil helped catapult the U.S. trade deficit in March to $43.5 billion, the second-highest level on record.
The Commerce Department reported Tuesday that the trade gap grew by 7.6 percent in March from February’s deficit of $40.4 billion.
Although exports went up in March for the third month in a row, imports rose nearly five times faster, leading to a bloated trade deficit that was second only to the record deficit of $44.9 billion produced in December.
“Boy, does this country like to buy things,” said Joel Naroff, president of Naroff Economic Advisors.
To combat the trade deficit, the Bush administration says the United States should seek to boost American exports by attacking foreign trade barriers, rather than raising barriers to imports coming into the country.
Trade critics, including labor unions, say the deficit is evidence that President Bush’s free-trade policies are not working and are contributing to hefty job losses in manufacturing.
“The gap between this president’s policies and the American workers who need jobs is widening by the day,” said Rep. Sherrod Brown, D-Ohio.
In March, imports of goods and services increased by 2.9 percent from the previous month, to $126.3 billion, the second-highest level of imports ever recorded for a month.
Imports of a wide variety of industrial supplies, including crude oil and plastics, rose to a record $28.3 billion in March.
America’s bill for imported crude oil hit a record $9.1 billion in March. That reflected an increase in the amount of imported crude oil to 300.7 million barrels of oil in March, from 247.1 million in February. The price of crude oil dipped to $30.27 a barrel in March, from $30.46 in February, which marked a 20-year high.
Although the United States’ economy is struggling to get back to full speed, its economic health remains better than many other countries’ that have been mired in a worldwide economic slump.
Exports of goods and services grew by 0.6 percent in March from the previous month to $82.8 billion. Private economists say the weaker U.S. dollar, which has lost altitude over the past year, is helping exports at a time of lackluster global demand. Weak growth abroad, however, will continue to challenge U.S. exporters, economists say.
In March, exports of industrial supplies, including cotton and chemicals, rose to $14.3 billion, the highest level since February 2001.
A weaker dollar makes U.S.-made products more competitive on foreign markets and less expensive for overseas buyers.
The U.S. dollar fell to a new four-year low against the euro Monday. The decline came one day after Treasury Secretary John Snow said a weaker dollar would help U.S. exports, a view that private economists and U.S. manufacturers share.
However, traders viewed the remarks as signaling a retreat from the long-standing position of the Bush administration and the previous Clinton administration in support of a strong dollar.
Treasury Department spokesman Rob Nichols on Monday said Snow’s remarks on Sunday were not meant to signal a shift away from a strong dollar policy.
Tuesday’s trade report also showed that the U.S. deficit with Mexico reached a record $3.9 billion in March. The U.S. trade shortfall with Canada widened to $5.2 billion in March, the highest level since January 2001.
The U.S. deficit with oil-producing nations, including Saudi Arabia and Venezuela, grew to an all-time monthly high of $5 billion in March.
The United States’ politically sensitive trade deficit with China grew to $7.7 billion in March, from $7.6 billion in February. In a bright spot, though, exports to China rose to a record $2.4 billion in March.
The United States’ trade gap with Japan widened to $5.8 billion in March, from $5.3 billion in February.
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On the Net: Trade report: http://www.commerce.gov/
AP-ES-05-13-03 1812EDT
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