Trade Gap Hits Yet Another Record; Despite a Weaker Dollar, Feb. Imports Exceed Exports by $61 Billion
The U.S. trade deficit rose to an all-time high of $61 billion in February, the Commerce Department reported yesterday, dealing a fresh blow to hopes that the gap will start to shrink soon in response to the decline in the dollar.</br></br>Exports stayed relatively flat, totaling $100.5 billion in February, just 0.1 percent, or $100 million, above the previous month's level. At the same time, the nation's pattern of importing more and more goods continued unchecked, as foreign products purchased by Americans rose 1.6 percent, or $2.6 billion, to $161.5 billion, led by oil, autos and consumer goods.</br></br>The politically sensitive U.S. deficit with China narrowed in February to $13.9 billion from January's $15.3 billion level. But critics of China pointed out that the combined figure for those two months was 47 percent above the same period last year and said the report will fuel growing sentiment in Congress for a tougher policy on Beijing's trade practices.</br></br>The overall gap was a record -- by itself nothing new, because the monthly trade deficit has smashed through previous highs eight times since the start of last year. But yesterday's report deepened concern that the flow of goods across U.S. borders does not seem to be responding to the dollar's fall, even though that decline has continued for three years.</br></br>A cheaper dollar is supposed to spur sales of U.S. exports by making American goods more attractive to foreign purchasers, and reduce Americans' appetite for foreign products by making them more expensive. Together with some private economists, Federal Reserve Chairman Alan Greenspan predicted late last year that the move in the currency would start to exert an effect on trade flows and shrink the gap in months to come. So far, however, signs of such a development have been scant.