Asia's Troubles Start To Slow U.S. Exports; Trade Deficit Rose to Record in January
The Asian financial crisis began to exert a serious drag on U.S. exports in January, according to a Commerce Department report issued yesterday. The lower exports helped drive the United States' trade deficit for that month to a record $12 billion.</br></br>The downturn in sales of American goods to Asia, which economists have anticipated ever since the region's financial markets collapsed last fall, has manifested itself up to now mainly in anecdotes about individual U.S. firms losing business.</br></br>But with yesterday's report "it's undeniable that the effect of the crisis is in the data," said David Hensley, an economist with Salomon Smith Barney in New York.</br></br>Hensley cited exports to South Korea, which plunged to $1.096 billion in January from $1.680 billion the previous month. "The level is all the way down to 1993 levels, so we've essentially given back in a few months about four years of export growth," he said.</br></br>Commerce Secretary William Daley agreed with that diagnosis, saying the crisis "has taken its toll on our exports." Excluding Japan and China, sales of U.S. goods in Pacific Rim countries fell about 10 percent, Daley noted, while imports from those countries rose about 7 percent, apparently because of rising demand for goods that have become cheaper due to falling Asian currencies.