US trade deficit plunges 16.9 per­cent in Fe­bru­ary

The China Post - - FRONT PAGE - BY JOSH BOAK

The U.S. trade deficit plunged in Fe­bru­ary as both im­ports and ex­ports sank, driven by a since­set­tled trade dis­pute and a global eco­nomic slow­down that has cut into oil prices and caused the dollar to rise in value.

The Com­merce Depart­ment said Thurs­day that the deficit plum­meted 16.9 per­cent to US$ 35.4 bil­lion in Fe­bru­ary, down from US$42.7 bil­lion in Jan­uary.

The sharp de­crease re­flects a US$10.2 bil­lion drop in im­ports since Jan­uary, likely due to cheaper oil prices and a sin­cere­solved West Coast ports dis­pute that in­ter­rupted the flow of 20 per­cent of the na­tion’s im­ports. The dis­pute led to sharp de­clines in im­ported goods from China and Ja­pan, caus­ing the trade deficit with both coun­tries to fall.

Ex­ports also tum­bled be­cause a strength­en­ing dollar has caused Amer­i­can- made goods to be more ex­pen­sive abroad. The ris­ing value of the dollar has curbed ex­pan­sion at U.S. fac­to­ries, ac­cord­ing to an in­dex re­leased Wed­nes­day the by In­sti­tute for Sup­ply Man­age­ment, a trade group of pur­chas­ing man­agers.

The trade deficit has fallen 3.2 per­cent com­pared to the same pe­riod last year. Econ­o­mists ex­pect the deficit to widen fur­ther in 2015, as a grow­ing U.S. econ­omy should fuel de­mand for im­ports while the stronger dollar re­duces ex­ports.

Im­ports ac­count for roughly 16 per­cent of gross do­mes­tic prod­uct, while ex­ports ac­count for 13 per­cent of GDP, ac­cord­ing to an­a­lysts at Bank of Amer­ica. The re­sult­ing trade deficit — which to­taled US$505 bil­lion last year — rep­re­sents roughly 3 per­cent of GDP and causes a drag on over­all growth.

The in­flu­ence of the ports dis­pute was ev­i­dent in the trade fig­ures with China. Im­ported goods from China de­creased US$3.5 bil­lion to US$36.3 bil­lion in Fe­bru­ary, a drop that may prove tem­po­rary based on his­toric pat­terns.

The po­lit­i­cally sen­si­tive deficit with China set an­other record high last year, surg­ing 23.9 per­cent to US$342.6 bil­lion. That con­stant gap has cre­ated pres­sure on Congress and the Obama ad­min­is­tra­tion to take tougher ac­tions against what crit­ics see as China’s un­fair trade prac­tices. U.S. man­u­fac­tur­ers say that China is ma­nip­u­lat­ing its cur­rency to keep it ar­ti­fi­cially low against the dollar.

The do­mes­tic en­ergy boom has kept the deficit in check. Not only has the U.S. re­duced its de­pen­dence on for­eign oil, but the fall­ing prices have fur­ther limited the cash value of im­ported petroleum.

Fe­bru­ary petroleum im­ports to­taled US$16.3 bil­lion, the low­est since Septem­ber 2004.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.