Boosted by rising prices on oil imports that more than offset higher exports to China, the U.S. trade deficit jumped to $63.9 billion in March, the Commerce Department reported May 10.
The trade shortfall grew 10.4% from the previous month. That was the sharpest monthly change in the trade picture since September 2005.
In March, imports surged 4.5% to $190.1 billion, while exports increased 1.8% to $126.2 billion. The $8.2 billion rise in imports was the largest dollar increase on record. Import volume in March included a $2.027 billion rise in crude oil imports, mainly on the back of a rise in the price of imported oil to $53 per barrel in March from $50.71 in February.
The deficit on automotive products increased to $11.2 million in March from $10.3 billion in February. Since December 2001, the deficit on vehicles has increased $1.6 billion or 17%, while the parts deficit has increased $1 about billion or 74% notes Peter Morici, professor at the University of Maryland School of Business.
Commenting on one of the reasons for the automotive trade deficit, Morici says, "Japanese and Korean manufacturers have captured larger market shares by offering more attractive and reliable vehicles than U.S. competitors, and are expanding their U.S. production. However, Asian manufacturers tend to use more imported components than domestic companies, and GM and Ford are pushing their parts suppliers to move to China."
Sources: Agence France-Presse, IndustryWeek Staff