U.S. Trade Gap Hits New High

The U.S. trade deficit hit an all-time high of $60.3 billion in November as American appetites for foreign oil and even imported food reached record levels.

The Bush administration urged other countries to help fix the problem, but analysts said the yawning deficit won’t be so easily solved.

The Commerce Department reported Wednesday that the shortfall between what the United States sells abroad and what it imports increased 7.7% from the previous record -- the October deficit of $56 billion.

That was a surprise given that oil prices had come down during the month. Analysts said it served to underscore the seriousness of the country’s trade situation.

The deficit through November totaled $561.3 billion and is expected to top $600 billion once December’s figures are tallied, far surpassing last year’s record of $496.5 billion.

“We now have the Grand Canyon of trade deficits,” said Joel Naroff, head of a Holland, Pa., forecasting firm. “Actually, deficit is really a misnomer. Chasm, gorge, black hole, infinitely deep well all fit the description better.”

Administration officials said foreign countries are not growing fast enough to stimulate domestic demand that would help boost U.S. exports. Treasury Secretary John W. Snow said in New York that finance officials from the world’s seven wealthiest countries would focus on ways to promote global growth when they meet in London in early February.

“We want to create more engines of world growth,” Snow said, contending that Europe and Japan need to do more to stimulate growth.

Snow said the administration has not changed its policy favoring a strong dollar, but currency traders believe the administration really wants the dollar to decline further to lower the trade deficit by making U.S. exports cheaper on foreign markets and making imports more expensive for Americans. News on the deficit sent the dollar sharply lower in trading Wednesday.

U.S. exports, which had been rising for much of the year, incurred a setback in November, falling 2.3% to $66.5 billion, reflecting widespread declines including in sales of American farm products, which slipped 1.7% to $4.7 billion.

The country is on track to record a deficit in farm goods -- once a major surplus area -- in 2004 as imports are running ahead of exports, reflecting strong consumer demand for various foreign foods.

Imports in November rose 1.3% to an all-time high of $155.8 billion. This increase was led by an 11.8% jump in petroleum products, which hit a monthly record of $19.4 billion, reflecting higher volume as the average price per barrel of crude oil edged down slightly.

With individual countries, the largest deficit, as usual, was with China, an imbalance of $16.6 billion, down slightly from October’s record.

The deficits with Canada, South Korea and Russia all set records. The deficit with Japan rose to $7.3 billion, which was the highest level since October 2000, while the deficit with the 25-nation European Union rose to $10.5 billion.