Robust Exports Aid Trade Gap

The U.S. trade gap narrowed slightly in June as exports boomed, but surging oil prices and rising imports from China kept the deficit on track for a record this year, a Commerce Department report showed Thursday.

The monthly trade deficit was $64.8 billion, down slightly from $65 billion in May as exports grew more rapidly than imports during the month. But the June gap was still the fifth-highest on record, while May’s was the third-highest.

Tensions over Iran’s nuclear program, China’s growing appetite for oil and bigger U.S. gasoline demand as the summer driving season began helped pushed average oil import prices to a record $62.04 per barrel in June.

The United States imported a record $20.5 billion worth of crude oil in June, compared with $14.6 billion the same month last year. Imports from Saudi Arabia, Venezuela, Nigeria and other members of the Organization of the Petroleum Exporting Countries were close to a record at $13.5 billion.

The overall trade deficit for the first half of 2006 totaled $383.9 billion, compared to $340.2 billion at the same point in 2005. If the deficit were the same in the second half of 2006, it would total a record $767.8 billion for the year.

The growing deficit has prompted calls from Democrats in Congress for a tougher U.S. trade policy, which includes bringing more cases against China and others at the World Trade Organization and strengthening enforcement against “dumped” and subsidized imports.

“It is painfully clear that America needs a new direction in trade policy,” said Rep. Benjamin L. Cardin (D-Md.). “Every day the administration waits to enforce the rules of trade and level the playing field for our workers is a day lost to our competitors.”

Imports from China totaled $24.1 billion in June, an 8.1% increase, the Commerce Department said.

The United States sucked in a record $185.5 billion in imports of goods and services from all countries in June, driven by strong demand for foreign cars, consumer goods and energy products.

But U.S. exports of goods and services also set a record in June at $120.7 billion, powered by new highs in food, feeds and beverages; industrial supplies and materials; and capital goods.

Exports rose 2% in June, while imports were up 1.2%.

In another report, the Labor Department said the number of U.S. workers seeking initial jobless aid unexpectedly rose 7,000 last week.