U.S. trade deficit hits new record

The monthly July 2006 trade deficit in goods and services shot up to $68.04 billion, the highest monthly total on record, and a nearly 5-percent jump from June's revised figure of $64.82 billion. A sharp increase in the deficits for manufactured goods and especially high technology products led to the July deficit that topped the previous record of $66.30 billion set in January by 2.62 percent.
July manufacturing exports of $60.81 billion represented a steep 12.16-percent decline from the June total of $69.23 billion. July manufacturing imports dropped also, but only from $121.58 billion to $117.53 billion. As a result, the manufacturing deficit soared by 8.35 percent to $56.72 billion.
According to Alan Tonelson, research fellow at the U.S. Business and Industry Council, the situation was even worse in the volatile but critically important field of advanced technology products. The July deficit of $4.6 billion was the third highest total on record and exceeded the June figure by more than 84 percent. U.S. exports of advanced technology products nose dived by nearly 12 percent from $22.22 billion to $19.60 billion, while advanced technology imports slipped only 2.10 percent from $24.72 billion to $24.20 billion.
Geographically, the U.S. trade deficit with China inched down in July by 0.66 percent. At $19.58 billion, however, it remained the largest bilateral deficit run by the United States, says Tonelson. "Not only does our chronic China deficit remain at unacceptable levels, but the United States remains stuck in deep deficit with our leading competitors in the industrialized world as well. Clearly, America's trade problems reflect far more than its strong appetite for imported oil," he says.