The U.S. trade deficit widened to $11.3 billion in September, the second-worst showing on record, as oil imports surged and heavy demand for toys and Christmas decorations kept America’s deficit with China at an all-time high.
The deficit in goods and services was up 10.1 percent from a revised August imbalance of $10.3 billion.
For the second straight month and third time this year, America’s deficit with China exceeded the imbalance with Japan. The September deficit with China was a record $4.7 billion, up 0.4 percent from August.
Commerce Secretary Mickey Kantor said the imbalance underscored the need for China to do more to lower trade barriers that are keeping out U.S. exports.
“We have made some progress in opening markets in China, but we have a long way to go,” he told reporters. “We want a level playing field. As they have access to our market, we want access to theirs.”
President Clinton was scheduled to have private talks Sunday with Chinese President Jiang Ziamen in Manila, the Philippines, where both leaders will be attending a Pacific Rim summit conference. Trade is a top item on their agenda.
So far this year, the U.S. trade deficit is running at an annual rate of $114 billion, even worse than last year’s imbalance of $105.1 billion.
Some private economists said current trends seem to be working against the United States and predicted the deficit will grow still higher in 1997.
“We have a serious trade problem,” said Lawrence Chimerine, chief economist at the Economic Strategy Institute, a Washington think tank. “All the numbers are getting worse.”
Other private economists said the unexpected widening of the deficit in September will contribute to a downward revision for overall economic growth, as measured by the gross domestic product.
The GDP for the July-September quarter was originally put at 2.2 percent, but Bruce Steinberg, an economist at Merrill Lynch, predicted that would be revised to an even more sluggish 1.5 percent.
Jerry Jasinowski, president of the National Association of Manufacturers, said American business executives are worried about the rise of the dollar acting as a further drag on exports at a time when the domestic economy is already slowing.
“If the current expansion is to continue, everything possible must be done to increase exports,” he said.
For September, the rise in the deficit with China reflected a second straight month of heavy demand for Chinese toys and holiday decorations.
America’s deficit with Japan actually edged down slightly in September, dipping 0.3 percent to $3.8 billion, reflecting in part an increase in U.S. exports of autos and auto parts to Japan.
The United States is hoping that last year’s landmark auto agreement with Japan will trim the trade imbalance between the two nations. In one of the few bright spots in the report, U.S. auto exports worldwide hit a record $5.9 billion in September.
Click here to comment on this story »