Trade Deficit Cut Sharply in December

The U.S. merchandise trade deficit narrowed sharply in December to $6.3 billion, but the 1990 imbalance totaled more than $100 billion for the seventh straight year, the government said today.

The Commerce Department said the 1990 deficit totaled $101.0 billion, down 7.7% from 1989 and the slimmest since a $52.4-billion gap in 1983. The deficit has declined each year since peaking at $152.1 billion in 1987.

Commerce Secretary Robert A. Mosbacher said the deficit would have fallen to $91.0 billion last year except for the increase in prices of imported petroleum after Iraq invaded Kuwait. Nevertheless, he said, the improvement “lays the foundation for even greater progress in the years ahead.”

The 29.8% improvement in December resulted from drops in both exports and imports. But exports fell just 2.1% to $33.5 billion, while imports plunged 7.9% to $39.7 billion.

The deficit is the difference between the two.

Both exports and imports posted records during 1990, but the 8.3% gain in exports offset the 4.6% advance in imports. Exports totaled $394.0 billion, while imports reached $473.2 billion.