2006 US trade deficit a new record
February 13, 2007
The United States’ trade deficit was up 6.5 percent in 2006 to $763.6 billion, according to a new report from the US Commerce Department. December’s trade deficit was $61.2 billion, 5.3 percent higher than November’s gap and more than had been anticipated. The December rise, $1.7 billion higher than expected, was due to higher oil prices and record imports of cars, auto parts, and consumer goods. While imports of oil cost the US $302 billion in 2006, the cost of buying foreign oil was not the whole story of the year’s trade deficit. Non-oil goods imports also set a record at $547.2 billion.
The trade gap with China was up by 15.4 percent to $232.5 billion for the year as a whole, even though the US exported goods and services worth a record $55.2 billion to China during 2006. Imports from China totaled $287.8 billion. The 2006 figures will likely only add fuel to the fire of US calls for a more flexible Chinese currency, which US legislators and manufacturers claim is being held artificially low by the Chinese government in order to gain an advantage in global markets.
In addition to the record trade deficit with China, the US also notched record in its trade deficits with Mexico and Japan in 2006. Still, even though the 2006 US trade deficit set a new record, growth of the deficit was slower last year than it was in 2005, when it grew by 17.3 percent.
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