Overall U.S. Trade Deficit Grows Wider : Commerce: Recession in partner nations hurts demand for exports. Gap had been expected to shrink in April.
America’s trade deficit with the rest of the world hit a four-year high of $10.49 billion in April, disappointing Clinton Administration officials and surprising analysts who had expected the shortfall to shrink.
The 0.3% widening of the trade gap from $10.45 billion in March, reported by the government Thursday, is likely to put more pressure on the Administration to find a way to reverse the trend. It also underscores the significance of U.S.-Japan talks intended to open Japanese markets to U.S. goods.
The Commerce Department attributed the April reading primarily to continuing recessions in Japan, Germany and other industrial nations where economic problems are dampening demand for U.S.-made products.
So far this year, the trade deficit is running at an annual rate of $109.5 billion, compared to last year’s $84.5 billion.
In addition to sluggish demand for American goods, Willard A. Workman, vice president for international affairs at the U.S. Chamber of Commerce, attributed the big monthly deficit to record-high oil imports, which rose in cost as the value of the dollar declined.
The report comes as the Administration is in the midst of trying to rewrite the rules of its trading relationship with Japan. The trade deficit with Japan was $5.5 billion in April, the third-largest imbalance ever recorded between the two countries and the largest gap since October, 1987.
While the increase in the global deficit was relatively small, it followed a staggering 32% increase in March and startled analysts who had predicted the gap would shrink to less than $9 billion in April.
“About the only good news is that U.S. sales abroad remained strong, especially to Canada and our Pacific Rim trading partners,” Workman said in a statement.
With no clear evidence that the deficit will begin to narrow soon, Workman said unanswered questions about key elements of U.S. economic and trade policy will leave matters unsettled for the foreseeable future.
“International business abhors uncertainty,” he said. Important trade and investment decisions on the part of American businesses will wait for clarification of the fate of the North American Free Trade Agreement and efforts to reduce international tariffs in the talks to revise the General Agreement on Tariffs and Trade.
Commerce Secretary Ronald H. Brown acknowledged that April’s report is disappointing and provides more evidence that the subject must be addressed when the leaders of the seven largest industrial democracies meet in Tokyo next month.
“The industrialized nations must work together to stimulate faster global growth and higher levels of trade,” he said.
U.S. imports in April totaled $48.87 billion, the Commerce Department reported. The 1% decline is smaller than expected and suggests that consumer interest in foreign-made goods has shown no significant sign of abating. Exports, valued at $38.38 billion, dropped 1.3%.
In a related development, the U.S. Trade Representative’s office announced that the foreign share of the Japanese semiconductor market dropped to 19.6% in the first quarter of 1993, down from the 20.2% reached during the final quarter of 1992.
U.S. Trade Representative Mickey Kantor said the figure nevertheless reflects the success of a continuing effort to penetrate the Japanese market and demonstrates that the 1992 fourth-quarter figure, considered a milestone, “was not just a one-quarter aberration.” Both figures represent levels of the semiconductor market considerably higher than any in previous years.
