MercoPress. South Atlantic News Agency

US trade deficit widens as US economy recovers from recession

US made engines, semi conductors, civilian aircraft; chemicals are in great demand in emerging markets

The US trade deficit widened to 39.7 billion US dollars in February, as import growth continued to outpace exports. The overall trade deficit increased by 2.7 billion from January, the Commerce Department said.

At 182.9 billion, imports were up 20.5% on the same month a year ago, while exports of 143.2 billion were up only 14.3%.

The trade figures confirm the trend of resurgent imports outpacing the rebound in exports as the US economy recovers from recession.

Compared with January on a seasonally-adjusted basis, imports were up 1.72% and exports were up 0.21%. Export growth was dominated by manufacturing, while imports were driven by consumption.

The figures suggest that the surprise fall in the US trade deficit recorded in January may only have been a blip.

However US companies are beginning to replenish inventories after last year’s record drawdown, also boosting demand for foreign- made goods and materials. But demand for US made engines, semi conductors and civilian-aircraft are also helping US exports particularly from growing demand in emerging countries.

The US surplus with newly industrialized countries in Asia, including Korea, Singapore and Taiwan, reached a record 2.2 billion USD as exports grew. Surpluses with Brazil and Argentina also climbed.

A growing world energy market is boosting sales of US-made chemicals and drilling equipment. Dow Chemical, US largest chemical maker, is benefiting from recovering growth in markets such as Brazil, where large discoveries of oil have been made.

An 11% drop in the value of the dollar against a trade-weighted basket of currencies from the nation’s biggest trading partners from a five-year high reached in March 2009 is also helping spur foreign demand.

President Barack Obama has said the US needs to focus on expanding exports and investment rather than depend on consumer spending as in the past. He plans to increase government-backed export financing for small businesses by 50%, to 6 billion USD annually.