The U.S. trade deficit narrowed last month to $2.58 billion, but Trade Representative William E. Brock warned that the trade position is deteriorating and the current account of the U.S. balance of payments will be in substantial deficit by the end of fiscal 1982.
The improvement in September was in relation to an unexpectedly bad trade performance in August. In July the trade deficit, which measures the excess of imports of goods and services into the United States over the value of U.S. goods sold overseas, totaled only $1.46 billion.
In September exports were up by 3.2 percent from their August level to $19.7 billion while imports fell by 9.9 percent to $22.2 billion, the Commerce Department reported. The resulting deficit was $3 billion less than the huge August deficit, after allowing for seasonal adjustment.
Oil imports last month were down to 187.8 million barrels, costing $6.5 billion, from 196 million barrels in August, the report showed. The U.S. trade deficit with OPEC narrowed to $2.09 million in September from $2.27 billion in August.
The September figures brought the nine-month trade gap to $29.3 billion compared with a $29.26 billion deficit in the same period last year. For the whole of calendar year 1980, the deficit totaled $36.36 billion.
The sharp rise in the value of the dollar, combined with a slowdown in the economies of the nation's European trading partners, has led analysts to expect a worsening in the trade balance in coming months. The higher dollar makes imports more attractive to U.S. consumers and exports more expensive and harder to sell overseas. Slower growth in Europe adds to the difficulties for U.S. manufacturers selling goods overseas.
Brock commented to House hearings on the administration's trade policy yesterday that Europe "just isn't a very good market for us" now. He added that U.S. exports have reached a plateau while imports are increasing. He said the U.S. current account, which includes trade in services and flows of profits between countries as well as merchandise trade, could be in deficit by the end of this calendar year, despite a $4 billion surplus through the first half of 1982.
The trade surplus with Europe widened to $1.45 billion in September, while the deficit with Japan narrowed to $1.36 billion.
Brock reaffirmed the administration's intention to eliminate worldwide export subsidies. Yesterday his office agreed to investigate a petition from the U.S. poultry industry charging the European Common Market countries with providing export subsidies for their poultry.
The world's free-market industrialized countries last year spent $5.5 billion in subsidies. France provided $2.3 billion, Japan $566 million, the United States $315 million and the United Kingdom $1 billion.
Brock said the administration should consider a proposal for an interest subsidy program "which would afford us the flexibility to match the subsidized financing offers of foreign governments, particularly in those sectors where predatory financing practices will continue despite" reform in the industrialized countries' arrangements for export subsidies.