The U.S. trade deficit, propelled by a record foreign oil bill, surged to $54 billion in August, the second highest level in history. The politically sensitive deficit with China hit a new high as American retailers upped their orders for cell phones, toys and televisions.
The Commerce Department said the August trade deficit in goods and services was 6.9 percent higher than a $50.5 billion imbalance in July. A small 0.1 percent rise in exports was dwarfed by a 2.5 percent jump in imports.
For the year, America’s trade deficit is running at a record annual rate of $590 billion, 19 percent higher than the previous record, last year’s $496.5 billion imbalance.
Imports climbed 2.5 percent to a record $150.1 billion in August, reflecting a 12.2 percent jump in petroleum shipments, which rose to a record $15.6 billion last month.
U.S. exports edged up 0.1 percent to $96 billion in August following an even larger 3 percent gain in July. Economists are hoping that an improving global economy will lift sales of American goods overseas. Sales of American cars and auto parts did hit a record, rising to $7.8 billion in August.
The U.S. trade performance has become an issue in the presidential race with Democratic challenger John Kerry charging that President Bush has not done enough to protect American workers from unfair trade practices from low wage countries such as China.
In Wednesday night’s final debate, Kerry criticized Bush for failing to pursue an unfair trade practice complaint against China on the grounds that it has rigged its currency system to keep the yuan undervalued by as much as 40 percent against the U.S. dollar, giving Chinese products a huge competitive advantage against American goods.