The nation's oil bill rose to a record in August and so did the value of goods imported from China, pushing the U.S. trade deficit to the third-highest level ever. The figures did not include hurricane-related increases in oil prices.
The deficit rose to $59 billion, about $1.1 billion more than in July, the Commerce Department said yesterday. There was a big increase in export sales of commercial jetliners, but that was swamped by foreign oil imports.
The U.S. deficit with China hit a monthly record of $18.5 billion in August. The deficit with China is 28 percent ahead of last year's pace, when it hit $162 billion, the highest ever with any country.
Pressure is increasing on the Bush administration to act. In Congress, there is wide support for legislation that would impose 27.5 percent penalty tariffs on all Chinese products unless Beijing allows its currency to rise further in value against the U.S. dollar.
Treasury Secretary John W. Snow visited the industrial city of Chengdu yesterday as part of a week-long tour of China. Snow is urging the Chinese to undertake faster changes in their currency system, boost domestic demand and allow foreign competition in financial services. Snow will be joined by Federal Reserve Chairman Alan Greenspan for discussions with the Chinese on Sunday and Monday.
The $59 billion August gap between what the United States sells abroad and what it imports was close to the high of $60.4 billion set in February.
The August imbalance was driven by a 12.2 percent jump in crude oil imports, which hit a record of $17.16 billion. Analysts said there will be a further jump in the September oil bill, reflecting the rise in prices since hurricanes Rita and Katrina.
The Labor Department said in a separate report yesterday that the price of imported goods rose by 2.3 percent in September. The gain, the biggest in 15 years, was driven by a 7.3 percent surge in petroleum prices.