Trade deficit narrows more than expected

The Obama administration is pressing Congress to pass the free-trade agreement with South Korea. 

On Wednesday, Valerie Jarrett, a senior adviser at the White House, said that passing the Korea free-trade agreement that was renegotiated in December would be the administration’s first legislative priority in this Congress. 

The increase in exports is good news for the Obama administration that is pushing to double exports in five years as part of a plan to increase economic growth and cut into high levels of unemployment. 

A week ahead of Chinese President Hu Jintao’s state visit with President Obama on Jan. 19, the trade deficit with China widened slightly to $25.63 billion from $25.52 billion in October, cutting into some of the improvement made during the past few months. U.S. demand for computers contributed to the deficit. 

Still, exports to China increased by 1.9 percent, hitting a new high of $9.48 billion while imports also grew, up 0.9 percent to $35.1 billion. 

The U.S. and China are at odds over its currency policy. 

Treasury Secretary Timothy Geithner said Wednesday that China needs to strengthen the “substantially undervalued” yuan because it puts other countries at a competitive disadvantage. 

“China’s exchange rate needs to strengthen in response to market forces,” Geithner said.