Trade Deficit Rose 65% in 1999 to $271 Billion

The U.S. trade deficit widened by more than $100 billion last year, reaching a record of $271.3 billion, the government said Friday. The booming U.S. economy pushed up demand for foreign goods, and the cost of imported oil more than doubled.

The Commerce Department also reported that trade deficits with Japan, China, Canada, Mexico and the 15-nation European Union all set records in 1999. The overall deficit rose by 65% from the previous record, 1998’s imbalance of $164.1 billion.

The trade deficit narrowed a slight 5.7% to $25.5 billion in December as exports climbed by 3.2% to outpace a 1% gain in imports.

For all of 1999, exports were up 2.7% to $958.5 billion, an improvement from a 1998 decline of 0.5%. But that small gain was swamped by a 12% rise in imports, which soared to $1.23 trillion last year.

The Clinton administration drew comfort from the fact that export sales are beginning to bounce back as overseas nations recover from the steep recessions brought on by the 1997-98 global currency crisis.

“Continued economic recovery abroad has spurred our exports in late 1999, particularly in December. If this trend continues, it bodes well for our trade balance,” said Commerce Department chief economist Lee Price.

The big rise in the deficit was due to a huge jump in oil prices. Crude oil rose from $9.19 a barrel last January to $22.67 a barrel in December.

The deficit also reflected an increase in the imbalance of imports over exports for cars and trucks, up $25 billion, and computers and office machines, up $7.7 billion.