Trade gap widens while exports continue to improve

Exports increased 1.8 percent to $163 billion from $160 billion the previous month, with civilian aircraft and autos and auto parts providing a boost. 

Behind the increase in imports is a 16.8 percent jump in imported oil, with prices rising to nearly $80 a barrel, the highest level since prices eclipsed $90 in October 2008. 

The upward trend in exports puts the Obama administration on the path to reach its goal of doubling exports by 2015, with exports needing to increase at about 15 percent a year to reach the administration’s $3.14 trillion target. 

For all of 2010, the trade deficit increased to $497.8 billion, a 32.8 percent jump, the largest annual percentage gain since 2000. 

Last year, exports expanded by 16.6 percent to $1.83 trillion while imports were up 19.7 percent to $2.33 trillion. 

The trade deficit with China shrank to $20.68 billion from $25.63 billion in November, as exports hit a new high of $10.12 billion, up nearly 7 percent. Imports were down to $30.80 billion, a drop of more than 12 percent to one of the nation’s top trading partners.

For 2010, the deficit with China rose by 20.4 percent, reaching a record high of $273.1 billion, the largest imbalance the United States has ever recorded with one country. 

Also last year, U.S. exports to China climbed to 32.2 percent to an all-time high of $91.9 billion. Meanwhile, Chinese imports also grew to a record high of $364.9 billion, an increase of 23.1 percent. 

The trade data hits as Congress faces several major and sensitive political issues including China’s currency manipulation and three pending trade agreements with South Korea, Colombia and Panama. 

Republicans are saying that the free-trade agreements will help with job creation and propel the economic recovery and are urging the Obama administration to expedite their completion. 

Several Democratic lawmakers re-introduced legislation on Thursday stating that China’s undervalued currency is giving that country an unfair trade advantage.

Earlier this week, U.S. Trade Representative Ron Kirk told the House Ways and Means Committee that the Korea FTA would reach Capitol Hill in less than a month while U.S. officials continue to work on the other two agreements. Committee Republicans argued that the trade agreements are ready and should be finalized by July 1.