Trade gap reaches record $66B

Energy imports fuel surge in September

WASHINGTON — The U.S. trade de ? cit jumped 11.4% to a new record in September — prompting fresh concern about the economy and new calls for the White House to take a tougher line against Chinese imports.

Driven by sharply higher costs for imported oil following Hurricane Katrina, the Commerce Department said the U.S. trade de ? cit surged to $ 66.1 billion in September from $ 59.3 billion in August. The one- month surge — the largest since mid- 2004 — far exceeded economists’ predictions.

The U.S. trade de ? cit with China was $ 20.1 billion in September, as U.S. imports from that nation increased to more than $23 billion. Overall U.S. exports declined, due in part to a decline in aircraft exports. The U.S. trade gap with Canada and South and Central America also set records.

Economists said the huge trade de ? cit means economic growth in the third quarter of 2005 could be somewhat slower than the stout 3.8% annual pace previously forecast.

The trade numbers should improve in October, since oil prices have moderated, while Boeing has settled a strike that affected U.S. aircraft exports. But the longerterm scenario is not as promising.

“ The trend is still for a deterioration. We’re still growing faster than other economies and the dollar has strengthened over the past year” making U.S. exports more expensive, says Nariman Behravesh chief economist for Global Insight. “ At least for the next year or two ( signs) are for a worsening of the trade de ? cit.”

Rep. Ben Cardin, D- Md., said the ? gures underscored the need for President Bush to take a tough line when he travels to China this month.

Washington and Beijing this week reached an agreement to limit Chinese clothing and textile exports to the USA through 2008. China earlier this year agreed to partially revalue its currency.

But U.S. busyness leaders, such as the National Association of Manufacturers, say China has done too little to followthrough .