U.S. Trade Deficit Hits Record High
Rising oil prices and Chinese textile imports help widen the gap to $61 billion in February.
By Bill Sing
Times Staff Writer
April 13, 2005

Surging oil prices and Chinese textile imports helped boost the U.S. trade deficit to a record $61 billion in February, the Commerce Department reported Tuesday, suggesting that economic growth this year wasn't as robust as previously believed.

The report calls for tougher curbs on Chinese clothing imports and for Beijing to stop undervaluing its currency, which critics say gives its exports an unfair advantage in global markets.

Some analysts said the deficit primarily reflected a strong U.S. economy as American consumers continued to gobble up foreign goods while consumers in the sluggish European and Japanese economies couldn't do much to reciprocate.

"The problem is we have an insatiable appetite for imports, especially from Asia," said Steven A. Wood, chief economist at Insight Economics in Danville, Calif. "That continues to wreak havoc with the trade balance."

Americans ultimately can't keep buying more from abroad than they sell, Wood said. "Eventually, you'll go deeper and deeper into debt, and that comes back to bite you."

Also getting blame for the record trade gap was the rising price of imported oil. And with petroleum prices having leaped further in March, the trade deficit is expected to set another record.