Newspaper article THE JOURNAL RECORD

March Trade Deficit Jumps 29.1%

Newspaper article THE JOURNAL RECORD

March Trade Deficit Jumps 29.1%

Article excerpt

WASHINGTON (AP) _ The U.S. merchandise trade deficit widened dramatically to $10.2 billion in March, the worst performance in almost four years, as Americans bought a record amount of foreign goods, the government said Wednesday.

The 29.1 percent jump in the trade gap over February's $7.9 billion deficit reflected across-the-board increases in a number of import categories ranging from foreign oil and autos to clothing and VCRs.

Analysts said the surprisingly bad trade report would cause the government to reduce its estimate for overall economic activity during the first three months of the year from an already anemic rate of 1.8 percent to possibly as low as 1 percent.

The Clinton administration immediately pointed a finger of blame at Japan. The deficit with that country shot up to a 5-year high of $5.26 billion in March.

Commerce Secretary Ron Brown called America's huge deficits with Japan, which accounted for 59 percent of America's total imbalance last year, unacceptable.

He said the administration intended to press Japan to agree to putting in place a "targeted, measurable" approach to lowering trade barriers modeled on an agreement that boosted Japanese purchases of U.S. computer chips.

In a statement, Brown said that the administration intended to prod Japan to enact its new economic stimulus package quickly, lower trade barriers and would also look to "market-driven exchange rate corrections" to lower the gap between the two nations.

Brown's comment caused the dollar to plunge in value against the yen as currency traders interpreted the remark as a renewed effort by the administration to talk down the dollar's value as a way of making Japanese imports more expensive and less attractive in the U.S. market.

Brown later insisted that the administration had no "policy to affect the exchange rate" of the dollar vs. the yen.

Analysts predicted that the March trade report would increase pressure on the Clinton administration to take a hard line with Japan. …

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