Trade Deficit With China Hits Record

The U.S. trade deficit narrowed only modestly to $10.8 billion in August, the second-worst showing in five years, as the deficit with China climbed to an all-time high.

The Commerce Department report Friday showed that the August deficit was down only 6.6 percent from a July shortfall of $11.6 billion, the worst showing since the government began tracking trade in goods and services on a monthly basis in 1992.

The huge deficits in July and August left the trade imbalance for the year running at an annual rate of $112 billion, meaning that the trade deficit, which has widened every year of the Clinton administration, will increase this year as well. Last year’s deficit in goods and services was $105.1 billion

The Chinese deficit climbed to a record $4.7 billion, up 23 percent from July. U.S. exports to China were down 22 percent, while imports rose 14 percent.

The U.S. deficit with Japan fell in August by 11.8 percent to $3.8 billion. For the first eight months of this year, America’s deficit with Japan was down 28 percent - the lowest level since 1992.