Oil Prices, Imported Goods Push Trade Gap to Record

China asserts that it has been made a scapegoat for the loss of U.S. manufacturing jobs. Many of China's exports are produced in factories owned by U.S. firms for shipment to American stores, said Zhang Erzhen, a trade expert at Nanjing University.

Zhang echoed contentions from Beijing that China's trade surplus with the United States would be smaller if Washington relented on national-security restrictions that bar Chinese companies from purchasing some U.S.-made high-technology goods.

Despite the gap, the trade figures confirmed a trend the Bush administration has been highlighting as it seeks congressional approval for trade pacts with Colombia, Peru and Panama: In 2006, U.S. exports grew faster than imports, slightly limiting the growth of the trade deficit.

"Our booming export numbers show the competitiveness of American workers and companies," Commerce Secretary Carlos M. Gutierrez said in a statement from New Delhi, where he was meeting with Indian leaders in talks aimed at boosting trade. "Our nation's prosperity is dependent on engaging and winning in international markets." Gutierrez noted that American exports to China grew by 32 percent last year compared with 2005.

The Bush administration has pointed to robust exports as it seeks to persuade Congress to renew the administration's authority to negotiate trade deals and submit them to Congress for a simple up-or-down vote without amendments. That authority, known as "fast-track," is set to expire at the end of June, leaving uncertain both the fate of pending deals and the long-stalled trade talks known as the Doha round, which are aimed at lowering tariffs around the world.

"Trade agreements mean more exports," U.S. Trade Representative Susan C. Schwab said during a speech Monday at the National Press Club, as she urged Congress to extend the president's trade authority. "More exports mean better jobs."

But labor groups, lobbying against an extension of the president's trade authority, noted that imports dwarf exports so much that the recent gains are essentially a trifle.

In 2006, the United States exported $1.4 trillion of goods and services, 12.7 percent more than in 2005, according to the Commerce Department. But imports climbed 10.5 percent to $2.2 trillion, leaving the $764 billion deficit. Since 2001, the trade deficit has jumped 110 percent, from $363 billion that year.

"If President Bush deserves blank-check trade negotiating authority from Congress with this record, then Paris Hilton deserves to be Girl Scout of the Year," declared Alan Tonelson, a research fellow at the U.S. Business and Industry Council, an advocacy group that opposes the administration's trade policies.

Though a record trade deficit had been expected, an the acceleration in December caught economists by surprise, leading to the revision of growth forecasts. A bigger trade deficit means more U.S. demand for goods and services was satisfied by imports rather than by domestic firms.

"The economy is on the soft side," said Jan Hatzius, chief U.S. economist for Goldman Sachs. He forecasts below-average growth this year, with a rise in unemployment.

Some analysts fret that the trade deficit's continuing climb raises the possibility of a precipitous drop in the dollar. For now, China, Japan and many oil-producing countries are plowing the proceeds of their exports to the United States back into the country by buying U.S. Treasury bills, propping up the dollar and allowing the Fed to keep interest rates low. But if these nations get spooked by the size of the trade deficit and reduce their dollar purchases, the value of the U.S. currency could plunge, forcing interest rates higher and hurting the economy.

"Instead of producing products, we're just printing money," said Peter Schiff, president of Euro Pacific Capital, a brokerage firm in Darien, Conn. "We're in serious trouble."

Correspondent Ariana Eunjung Cha in Shanghai contributed to this report.