Trade deficit hit record in February

The U.S. trade deficit hit a record monthly high of $61.04 billion in February as imports of oil and textiles surged while American exports barely budged.

The deficit figure sent tremors through Wall Street with investors worrying that the huge amount of foreigners’ money America needs to finance the deficit could at some point trigger a freefall in the dollar and aggravate U.S. inflation problems.

The February deficit, which was up 4.3 percent from a January trade gap of $58.5 billion, was seized upon by Democratic critics as further evidence that President Bush’s free trade policies are not working. They vowed to oppose Bush’s drive to win passage of the Central American Free Trade Agreement covering six Latin American countries.

“Uncle Sam has been played for Uncle Sucker by incompetent trade negotiators, a failure to enforce trade agreements and by our trading partners who see the U.S. as a patsy,” said Sen. Byron Dorgan, D-N.D., who is leading the effort to defeat CAFTA.

The big jump in textile and clothing imports was expected to spur pressure on the administration to erect barriers to protect domestic manufacturers from a surge in imports from China since global textile quotas expired at the beginning of this year.

Imports of Chinese textiles and clothing are up a sharp 62.4 percent in the first two months of this year, compared with the same period a year ago.