Just days before President Clinton meets with Pacific Rim leaders, record trade gaps with China and other Asian nations pushed the U.S. deficit to the worst showing in eight months.
The deficit in goods and services jumped 17 percent to a seasonally adjusted $11.1 billion in September, as U.S. retailers stocked holiday shelves with Chinese-made toys and other goods.
The Commerce Department released the discouraging figures Thursday as Clinton prepared for the weekend Asian Pacific Cooperation forum in Vancouver, British Columbia, where he and 17 other Pacific leaders are to grapple with Asian currency crises jolting world financial markets.
Less than a month after Chinese President Jiang Zemin paid a state visit to Washington, the department said the trade gap in goods with China jumped 13.4 percent to a record $5.5 billion.
China makes half of all toys sold in the United States. September toy imports from China surged by $200 million.
Telephone equipment imports rose too while America’s biggest export to China, commercial aircraft, fell.
The deficit with Japan increased 6.9 percent to $5.1 billion. U.S. purchases of electrical machinery and photo equipment rose while sales of aircraft and cars to Japan slumped.
“Our trade situation with Japan and China remains problematic,” said Commerce Secretary William Daley. “The growth of our exports to China continues to lag far behind growth of our imports. … This time of year we see a large influx of low-tech imports from China related to the Christmas season.”
Meanwhile, the deficit with the “newly industrialized countries” - Hong Kong, South Korea, Singapore and Taiwan - more than doubled to a record $2 billion, pushed by a flood of computer imports.
Economists said September’s big trade deficit may be just the first sign of fallout from currency crises roiling Asia since midsummer.
“You ain’t seen nothing yet,” said economist Lawrence Chimerine of the Economic Strategy Institute, a Washington think tank. “This is just the tip of the iceberg … of what will be a further substantial increase in our trade imbalance.”