The United States' merchandise trade deficit dipped to $11 billion in March, but without significantly slowing the record pace for the year that has dragged down the economy, the Commerce Department reported yesterday.
The March total was down slightly from February's $11.4 billion figure. Nonetheless, the deficit for the first quarter of the year is running at an annual rate of $131 billion, resulting in predictions that the 1985 total will top last year's record deficit of $123.3 billion.
The Commerce Department said that the picture would have been bleaker, with a damaging surge of imports, except for a sharp decline for the fourth straight month in the value of petroleum products brought into the country.
Manufactured goods -- including telecommunications equipment, industrial machinery, chemicals, footwear and clothing -- continued to pour into the country as total imports reached $29.3 billion, an increase of less than 1 percent over February. Petroleum imports, however, showed a 16.8 percent decrease.
"The leading indicators, down 0.2 percent in March, have been affected by the loss in market shares to foreign manufacturers," Commerce Secretary Malcolm Baldrige said.
"The economy probably will strengthen during the current quarter, but domestic production gains will be limited by higher imports and flat export sales," he continued. "This drag on the economy would be moderated by reducing the budget deficit, lowering barriers" to American exports "and by stronger growth abroad."
House Democrats blamed an overvalued dollar for much of the trade deficit and called on the Reagan administration to convene an international monetary conference this year. The Democrats thus allied themselves with the United States' European allies -- especially France -- who are pressing Reagan to include monetary reform with his push at this week's economic summit for a new round of global trade talks.
Rep. Sam Gibbons (D-Fla.) said the March trade figures show "there is no turnaround" in economic problems caused by the supercharged dollar. Senate Democrats, headed by Lloyd Bentsen (D-Tex.) and a key Republican, John C. Danforth (R-Mo.), also pressed President Reagan to concentrate on correcting world currency misalignments rather than pushing for new trade talks.
Bentsen also complained that Reagan is bringing no trade specialists in his entourage to the summit, which starts Thursday in Bonn. "I think that is a serious mistake. It shows a lack of giving trade the priority and commitment that it needs. The trade deficit is not going to get turned around until the administration gets a coordinated trade policy and begins to show leadership in the White House," Bentsen said.
Baldrige said the dollar has increased 17 percent since March 1984 and 78 percent from its low point in July 1980.
A strong dollar makes American products more expensive in other countries and lowers the price of imports, making them more attractive to Americans.
The increase in overall imports was moderated by decreases in the number of automobiles shipped to the United States, especially from Japan, which most likely cut its shipments to conform to quotas that ended March 31. The Japanese government, however, announced that it will allow a 25 percent increase in automobile shipments to the United States for the next 12 months. Automobile shipments from Canada increased, indicating that the U.S. market remains firm.
Imports for the first quarter ran ahead of exports by $32.7 billion, an increase of 9 percent over last year's record pace, overwhelming slight improvements in U.S. companies' export performance.
U.S. overseas sales jumped to $18.4 billion in March, a 3.3 percent increase over February's $17.9 billion figure and 3 percent higher than the previous March. Exports had dropped by 8 percent in February for the sharpest decline in seven years. Overseas sales of aircraft and parts overcame a 13.6 decrease in exports of farm products in March.
The trade deficit with Japan, which is the United States' largest, dipped slightly in March to $3.2 billion, the lowest level since December and $1 billion less than February. The United States also recorded trade deficits of $2.1 billion with Canada, $1.7 billion with Western Europe and $1.3 billion with Taiwan.