U.S. Trade Deficit on pace for $700 billion plus

[tsluver247]

U.S. trade deficit narrows slightly (http://news.yahoo.com/s/ap/20060810/ap_on_bi_ge/economy_8)



By MARTIN CRUTSINGER, AP Economics Writer Thu Aug 10, 2:15 PM ET

WASHINGTON - America's trade deficit improved slightly in June as record sales of U.S. farm products and other exports blunted the impact of soaring crude oil prices.
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The deficit for June dipped 0.3 percent to $64.8 billion, which was still the fifth largest deficit on record. The imbalance in May was revised to $64.97 billion, $1.1 billion higher than the initial estimate a month ago as late data showed bigger shipments of oil and consumer goods than originally reported .

Through the first half of this year, the deficit is running at an annual rate of $768 billion, putting it on track to surpass last year's record of $716.7 billion. Democrats hope to use the worsening trade deficit to attack Bush administration trade policies and argue that a tougher approach is needed, particularly with countries such as China.

In other news, the number of newly laid off workers filing claims for unemployment benefits rose by 7,000 last week to 319,000, a bigger gain than economists had been expecting.

The deterioration in the deficit this year is largely a result of soaring global oil prices, reflecting increased tensions in the Middle East and higher demand from developing countries such as China.

For June, the average price for a barrel of imported crude oil hit an all-time high of $62.04, pushing total crude oil imports to a record high of $20.5 billion. All petroleum imports, reflecting crude and refined products, totaled $27.3 billion, the second highest level on record after May's $28.3 billion.

America's foreign oil bill is expected to rise even more in coming months, reflecting the fact that crude oil has been trading above $75 per barrel in recent days as markets respond to the deteriorating security situation in
Iraq and the outbreak of fighting in Lebanon.

For June, the smaller deficit reflected the fact that U.S. exports rose a solid 2 percent to total a record $120.7 billion, a manifestation of record sales of American farm products and strong gains in other areas.

Imports also rose to a record of $185.5 billion, an increase of 1.2 percent, as shipments of consumer goods set a record and auto imports climbed to the second highest level on record.

The politically sensitive deficit with China increased by 11.9 percent in June to $19.7 billion as U.S. exports to China fell by 4.3 percent while imports of Chinese products into the United States rose by 8.1 percent. The import gains were led by big increases in clothing and computers.

So far this year, the deficit with China is running 13 percent above the pace set last year, when the imbalance hit $202 billion, the highest ever recorded with a single country.

That soaring deficit has raised complaints in Congress where key lawmakers are pushing a bill that would impose 27.5 percent tariffs on all Chinese products coming into the United States unless the country moves more quickly to allow its currency to rise in value against the dollar.

American manufacturers contend that the Chinese yuan is undervalued by as much as 40 percent, giving the country a trade advantage by making Chinese goods cheaper in comparison to U.S. products. Treasury Secretary Henry Paulson has pledged to keep pressing the Chinese to revalue their currency but so far Chinese officials contend that they must go slowly to avoid disrupting their economy.

U.S. exports with many parts of the word have been rising in recent months as American companies are benefiting from a pickup in global economic growth.

U.S. exports to the 25-nation
European Union and to South America and Central America set all-time highs in June while exports to Japan climbed to the highest level since March 2001.

[Quinn]

Great article.

-Quinn

[White_Male_Canada]

I go out of my way to avoid the 'made in china' label.

Do you ?

[chefmike]

Report From Beijing: Dynamic Growth, Oil, Pollution, Trade Balances And The Price Of Gas
Raymond J. Learsy

I first visited this city in 1980. In those days, it was a radically different place. The roads were clogged with bicycles, and people dressed uniformly in Mao jackets and quilted overcoats. Only the Beijing Hotel was open to non Chinese. Its lobby was front office, business center, and newsroom headquarters rolled into one, and it was both bustling and messy, with newspapers and working documents strewn all over its coffee tables.

If you wanted food other than local or traditional fare, forget it. Another memory that stands out in my mind: the road in from the one building at Beijing Airport. It was mostly two lanes replete with potholes and occasionally lined with trees and rice paddies and stretches paved with dirt. Hardly a building stood higher than six stories in "downtown" Beijing.

Now, of course, it is truly difficult to convey the changes made in the past quarter century. While Rome wasn't built in a day, it certainly wasn't built in a quarter of a century. But the new Beijing -- giving full homage to its great historical treasures, such as the Forbidden City -- has been, and that is much of its current fascination. The city is marked by towering buildings, modern highways, endless elegant 20-to-30-story apartment blocks, and busy traffic. The bicycles remain but are accommodated with an elaborate network of dedicated bike lanes. Upscale stores are everywhere, and restaurants offer virtually any cuisine you could wish for. The hotels are elegant and punctilious. And there is more to come. In preparation for the 2008 Olympics, architectural marvels are now under construction -- from the spell-binding Herzog and de Meuron Olympic stadium to the breathtaking Rem Koolhaas CCTV office tower and the Paul Andreau National Grand Theater. By 2008, this city's grandeur may well be in league with that of ancient Rome. Beijing is experiencing the perfect storm of dynamic leadership, willingness to take architectural risk within a context of brilliant design, and seeming willingness to spend whatever it takes. It is as if the soul of a nation and its people are committed to these and other projects to making Beijing great -- and to welcoming the world in 2008.

And yet, and yet not all is well in this boldly aspiring world-class metropolis. And therein lies a cautionary tale for all of us. As I look out of my hotel room window toward the ambitiously emerging skyline, nothing can be clearly seen. The city is swathed in an amber mist, the smog of unfettered and incautious economic development unchecked by environmental standards or until recently, concerns. As I have been told by those who live here, environmental deterioration is now China's most pressing problem. Years of plant emissions, both into air and rivers in the headlong rush to economic betterment -- one cannot forget the flip side, more than 300 million people have been lifted to the consumer class from abject poverty -- the growing fleets of cars and expanding fossil fuel emissions, notably from coal-fired power and industrial plants, are turning China into an ecological disaster.

The government isn't impervious to the problems, and policies are beginning to change. China is embracing non-air polluting nuclear energy with the goal of constructing up to 40 nuclear power plants by 2020. The goal is to reduce dependence on and emissions from coal-fired plants (see post "China Kissing OPEC Goodbye", 02/12/06).

In other cities, a glimpse of the future is already possible. An hour and a half's drive from Shanghai is the city of Suzhou. Suzhou is best known for its majestic gardens and as the ancestral family home of the celebrated architect I. M. Pei, whose credits include the National Gallery and the renovation of the Louvre. His brilliant new museum in Suzhou is nearing completion. But back to the point: The city is filled with motorized bicycles and motor bikes -- all powered by plug in battery electric power. No gasoline motorcycles or gasoline powered motorbikes are permitted within the city limits. Here is a real step toward abatement of pollution from fossil fuels. It is also an example that should be an inspiration to communities around the world.

Oh, something else I learned in China: Every time you buy a product from this country, you are putting upward pressure on the price of oil. How's that you ask? Well, you see, in China gasoline is both price controlled and indirectly subsidized. Refiners are losing money buying crude oil high and selling gasoline cheaply. But who owns, and or controls the refiners, directly or indirectly? Right, the government, and it can afford to do that because of its vast trove of dollars earned in selling us and others everything from clothes and household goods to electronic odds and ends. So the more Chinese products you buy the greater China's trade balance with us, the more oil they can buy on the world market in competition with us and others, the higher goes the price of oil.

Clearly, the more they subsidize, the more gasoline and crude oil is used here in China. Fear of inflation and social unrest make the government reluctant to let prices push higher other than in measured steps. Just the other day a new price increase was announced, bringing the gas price to about $2.10 per gallon equivalent. I'm thinking about tanking up before I go home.

http://www.huffingtonpost.com/raymond-j-learsy/report-from-beijing-dyna_b_21797.html

Raymond J. Learsy is the author of the book Over a Barrel: Breaking the Middle East Oil Cartel. A graduate of the Wharton School, he made his life in the fast-paced, risk-filled world of commodities trading, beginning in 1959. In 1963, he started his own firm and over twenty years expanded from the U.S. into Canada, the United Kingdom, Luxembourg, Brazil, and Pakistan, trading in an array of bulk raw materials and commodities, shipping to customers worldwide.

Any of you tolerant liberals want to point the finger on this one?

[tsluver247]

Any of you tolerant liberals want to point the finger on this one?

I voted for Republicans in the past because they talked about fiscal responsibility. Since they have gained all levels of government, they have showed nothing but fiscal irresponsibility. Fact, under the two Bush administrations and Reagan's administration the federal deficit accounts for more than 60%. Trade deficits are something that both parties. Reagan signed Canada-U.S. Treaty. Clinton signed NAFTA. Bush signed DR-CAFTA. Both parties have not done much to curb the deficit.

Any of you tolerant liberals want to point the finger on this one?

I voted for Republicans in the past because they talked about fiscal responsibility. Since they have gained all levels of government, they have showed nothing but fiscal irresponsibility. Fact, under the two Bush administrations and Reagan's administration the federal deficit accounts for more than 60%. Trade deficits are something that both parties. Reagan signed Canada-U.S. Treaty. Clinton signed NAFTA. Bush signed DR-CAFTA. Both parties have not done much to curb the deficit.


LOL! I just KNEW you'd point the finger where it doesn't belong.... be it Clinton or Bush.

That's what liberals do. They never look at their own actions.

[tsluver247]

Any of you tolerant liberals want to point the finger on this one?

I voted for Republicans in the past because they talked about fiscal responsibility. Since they have gained all levels of government, they have showed nothing but fiscal irresponsibility. Fact, under the two Bush administrations and Reagan's administration the federal deficit accounts for more than 60%. Trade deficits are something that both parties. Reagan signed Canada-U.S. Treaty. Clinton signed NAFTA. Bush signed DR-CAFTA. Both parties have not done much to curb the deficit.


LOL! I just KNEW you'd point the finger where it doesn't belong.... be it Clinton or Bush.

That's what liberals do. They never look at their own actions.

I consider myself a libertian. I used to consider myself a moderate Republican. But the Bush Administration showed their is no room for moderates in the Republican party while he is running the show, since he let the neo-con take over. Neo-cons or neo-nazis are quick to label people, divide America, and distribute message of hate and fear. Remember "United We Stand, Divided We Fall".

I find it funny how neo-cons continue to blame liberals and Democrats for all the problems in the world. Yet the Republicans own all branches of the government and their approval ratings are in the dumps. It sounds like your neo-con, neo-nazi, hate and fear tactics at near the end days.

Are you staying it is not a fact that under the two Bush administrations and Reagan's administration the federal deficit accounts for more than 60%? Then do the math yourself (http://www.publicdebt.treas.gov/opd/opdhisto4.htm), if you can.

Any of you tolerant liberals want to point the finger on this one?

I voted for Republicans in the past because they talked about fiscal responsibility. Since they have gained all levels of government, they have showed nothing but fiscal irresponsibility. Fact, under the two Bush administrations and Reagan's administration the federal deficit accounts for more than 60%. Trade deficits are something that both parties. Reagan signed Canada-U.S. Treaty. Clinton signed NAFTA. Bush signed DR-CAFTA. Both parties have not done much to curb the deficit.


LOL! I just KNEW you'd point the finger where it doesn't belong.... be it Clinton or Bush.

That's what liberals do. They never look at their own actions.

I consider myself a libertian. I used to consider myself a moderate Republican. But the Bush Administration showed their is no room for moderates in the Republican party while he is running the show, since he let the neo-con take over. Neo-cons or neo-nazis are quick to label people, divide America, and distribute message of hate and fear. Remember "United We Stand, Divided We Fall".

I find it funny how neo-cons continue to blame liberals and Democrats for all the problems in the world. Yet the Republicans own all branches of the government and their approval ratings are in the dumps. It sounds like your neo-con, neo-nazi, hate and fear tactics at near the end days.

Are you staying it is not a fact that under the two Bush administrations and Reagan's administration the federal deficit accounts for more than 60%? Then do the math yourself (http://www.publicdebt.treas.gov/opd/opdhisto4.htm), if you can.


You're not making sense at all. This thread is not about the federal deficit.