Newspaper article THE JOURNAL RECORD

Surging Foreign Trade Lifts Deficit to Record

Newspaper article THE JOURNAL RECORD

Surging Foreign Trade Lifts Deficit to Record

Article excerpt

WASHINGTON (AP) -- A surging foreign oil bill helped push the U.S. trade deficit to another monthly record of $25.9 billion in October. The deficits with Japan and China also set marks, prompting the Clinton administration to warn that continued high deficits could set off a political backlash in this country.

The October deficit, the seventh monthly record this year, was up 7.4 percent from a September shortfall of $24.2 billion.

American exports slipped 0.1 percent to $81.9 billion, the second straight monthly setback, as sales of American farm products, computers and telecommunications equipment all fell.

Imports, meanwhile, surged by 1.6 percent to a record $107.9 billion. Consumer goods jumped sharply and America's oil deficit also widened to a record, reflecting another sharp increase in world crude oil prices.

Private economists had hoped that improvements in the economic fortunes of a number of countries leveled by the two-year global financial crisis would help boost U.S. exports. But they said the new report showed the export rebound will take longer than expected.

"Despite our hopes of a few months ago, it seems clear that economic conditions overseas are not improving enough to sustain a significant boost in our exports," said Michael Fenollosa, economist at John Hancock in Boston.

The administration insisted the deficit had to be viewed in the context of what Commerce Secretary William Daley called "an incredibly strong" U.S. economy.

But Daley warned that while economically the trade deficit could be sustained, politically it was becoming more of a burden. Congress is coming under protectionist pressures from steel and other industries hurt by cheap imports.

"It is imperative that we keep our economy moving and our markets open," Daley said at a briefing on the trade figures. "But politically that gets very difficult over a long period and other countries around the world have got to understand that."

President Clinton had hoped to launch a new round of global trade talks in Seattle earlier this month. …

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