Trade deficit swells on heavy oil imports

WASHINGTON — The U.S. trade deficit rose to $56.96 billion in April as a big jump in exports was swamped by record foreign oil prices and heavy American demand for imports.

The Commerce Department reported Friday that both exports and imports climbed to record levels. Imports rose 4.1 percent to $163.38 billion, led by a higher foreign oil bill.

Exports were up 3 percent to $106.42 billion, thanks to strong demand for American-made commercial aircraft, computer chips, industrial machinery and cars.

The April deficit, which was the fourth largest on record, was up a sharp 6.3 percent from a revised trade gap of $53.56 billion in March, which had been an improvement from February’s record $60.12 billion deficit.

So far this year, the trade deficit is running at an annual rate of $686 billion, 11 percent higher than the record $617.58 billion deficit set for all of 2004.

The Bush administration insists that the soaring trade deficits reflect a faster-growing U.S. economy at a time when major trading partners in Europe and Japan are struggling with anemic growth that has cut into demand for American goods.

However, critics contend that the deficits are the result of failed administration free trade policies which have produced a string of record deficits and the loss of more than 3 million manufacturing jobs over the past five years.

In an effort to answer the critics, the administration has recently toughened its stance with China. It has re-imposed quotas on Chinese textile and clothing imports, increased pressure on China to overhaul its currency regime and sent Commerce Secretary Carlos Gutierrez to Beijing last week to complain that China is not doing enough to halt rampant piracy of American movies, music and computer programs.

For April, the deficit with China rose 14 percent to $14.7 billion.