MercoPress. South Atlantic News Agency

US trade deficit hits new monthly record

The United States trade deficit hit a record 69.9 billion US dollars in August owing to a surge in imports of Chinese goods and expensive oil, reported the Commerce Department.

The release said the shortfall jumped 2.7% from July's figure of 68 billion, which itself was a new high at the time. Wall Street analysts had expected the deficit to fall to 66.5 billion in August. Exports rose 2.3% in August to 122.4 billion while imports were up a faster 2.4% to 192.3 billion.

The politically sensitive deficit with China jumped 12.2% to a new record, 22 billion, which inflamed criticism of Chinese trade policies as US legislators prepare for the mid term elections of November 7 with opposition Democrats poised to regain control of Congress.

The American Manufacturing Trade Action Coalition called the figures "disastrous" for US industry and accused the government of inaction. "Americans are tired of the same old excuses" said director Auggie Tantillo.

"The US foreign trade deficit keeps rising and the Chinese still manipulate their currency and engage in unfair trade practices to steal jobs from hard-working Americans" he underlined.

China released Wednesday its foreign trade report for September showing a sharp drop in surplus to 15.3 billion from 18.8 billion in August. But this won't prevent China from having a record year in 2006.

The deficit in the US petroleum balance also hit a new high of 27.2 billion in a month that saw average prices of imported oil reach an all-time peak of 66.12 a barrel. Oil imports represent 40% of the US trade deficit.

In the first eight months of 2006, the US trade deficit stands at 522.8 billion, well ahead of the 457 billion US dollars for a similar period last year. This means the US 2006 trade deficit is on course to smash last year's 717 billion