MercoPress. South Atlantic News Agency

US trade deficit in 2006 remained at 5.8% of GDP

The United States trade deficit rose 6.5% last year reaching a new record high of 763.6 billion US dollars reported Tuesday the US Department of Commerce.

Fuelled by last year's rise in global oil prices and the surge in Chinese imports, it was the fifth record annual US trade deficit in succession. The gap with China alone was 232.5 billion last year, up 15.4%, the largest imbalance the US has ever recorded with one country. The trade gap, above market forecasts, was boosted following December's 61.2 billion US dollars deficit, up 3.1 billion from November 2006. However the trade deficit managed to remain at 5.8% of GDP, similar to 2005. Similarly although the deficit for 2006 as a whole was a fresh record, the rate of increase, 6.5%, was a slowdown on the 17.3% rise seen in 2005. Last year US exports of goods and services rose 12.8% to 1.44 trillion US dollars, while its imports gained 10.5% to 2.2 trillion, said the Commerce Department. Net oil imports soared 18%, from 229 billion to 270 billion US dollars. As usual the US experienced a surplus in services, 72.5 billion (up 6.5 billion) while the shortfall in goods jumped to 836 billion, which is 53.3 billion higher than in 2005. While America's annual deficit with China gained 15.4% in 2005, the shortfall with Japan rose 7.2% and with the European Union was down 4.7%, helped by the higher value of the euro. The huge deficit with China anticipates further pressure from US Congress which has been threatening with imposing counter balance measures to compensate for the "artificially low" Yuan. China denies the allegations but has pleaded to allow the Yuan to float more freely in the future, but says any reform would not be rushed, as it does not want to risk destabilizing the export-led Chinese economy.