America’s trade deficit soared to an all-time high of $60.3 billion in November, reflecting record levels for imports of everything from oil and consumer goods to farm products, the government reported Wednesday.
The Commerce Department said the November deficit was up 7.7 percent from an imbalance of $56 billion in October, which had been the previous monthly record. The new record caught private economists by surprise. They had been forecasting a slight narrowing in the November trade gap.
The trade deficit through November totaled $561.3 billion, far above the previous annual record of $496.5 billion set in 2003, and put the country on track to record a trade imbalance topping $600 billion when the December figures are added.
The November deficit reflected record imbalances with a number of countries including Canada, South Korea and Russia. The largest deficit as usual was with China, although the $16.6 billion gap was down slightly from October.
Critics point to the yawning deficits as evidence that President Bush’s trade policies are not working. Democrats contend that the administration has not done enough to protect American workers from unfair competition from low-wage foreign countries such as China.
The administration counters that the trade gap is primarily a reflection of a U.S. economy that has been growing faster than most of the rest of the world.
Private economists are concerned, nevertheless, about whether America will have the ability to continue finance trade deficits at such high levels.
If foreigners suddenly decide that they do not want to hold dollars in payment for the foreign goods that American consumers love to purchase, it could put added downward pressure on the American currency, which has been declining in value against a number of other currencies for the past three years.
The administration insists it still favors a strong dollar policy although it has done nothing to slow the greenback’s decline, a drop that economists believe eventually will help to narrow the trade gap by making U.S. products cheaper on overseas markets and imports more expensive in the United States.
U.S. exports, which had been rising for much of the year, suffered a setback in November, falling 2.3 percent to $66.5 billion. It was the first decline in five months and reflected a drop in shipments of U.S. autos and auto parts, civilian aircraft, telecommunications equipment and industrial machinery.
Overseas sales of American farm products, for years a star performer among American exports, slipped by 1.7 percent to $4.7 billion with shipments of fruit, soybeans and vegetables all showing declines. The country is on track to record a deficit in farm goods this year as imports are running above exports through November, reflecting a surge in consumer demand for foreign wines, fruits and other foods.
Imports in November rose 1.3 percent to an all-time high of $155.8 billion. This increase was led by an 11.8 percent jump in petroleum products, which hit a monthly record of $19.4 billion.
The increase in America’s foreign oil bill reflected higher volume. The average price of crude oil dipped a bit to $41.15 per barrel, compared to $41.79 in October.
With individual countries, the deficit with Canada, America’s largest trading partner, hit a record high of $7.3 billion. The deficit with South Korea rose to a record $2.3 billion while the deficit with Russia increased to $1.3 billion. The deficit with Japan rose to $7.3 billion, which was the highest level since October 2000