Trade deficit narrows, hits record high with China

Meanwhile, the trade gap with China hit a record high for a single month, rising to $28.96 billion from $26.96 billion.

Through August, the deficit with China is 9 percent higher than the same period in 2010, when there was a record gap between the two nations. 

As a potential remedy, the Senate passed a bill that would force China to let its currency value rise against the dollar or face higher tariffs on some goods. 

Lawmakers in the House also are pressing for the measure’s passage but it’s uncertain as to whether there is enough support in the lower chamber. 

Critics argue that China is keeping its currency low to maintain an international trade advantage. 

“The record trade deficit with China is the closing argument against China’s currency manipulation,” said Scott Paul, executive director of Alliance for American Manufacturing.

On Wednesday, Congress approved three trade agreements with South Korea, Colombia and Panama that had languished for years. 

The administration says the three deals will boost U.S. exports by $13 billion a year, but opponents argue that the trade pacts will create U.S. job losses as well as increase the trade deficit. 

“The damage to our economy from bad trade agreements is one of the few issues on which Americans across the political spectrum agree,” said AFL-CIO President Richard Trumka
 in statement. 

The Economic Policy Institute predicts that the trade deal with Korea could cost nearly 160,000 American jobs, he said. 

He called the deal with Colombia “immoral” because of continued violence against trade unionists. 

On the other side of the trade argument is the U.S. Chamber of Commerce, which has been pressing Congress to pass the deals, saying “passing these trade agreements represents a victory for American workers, American competitiveness and American leadership,” said Thomas Donohue, president and CEO of the U.S. Chamber.  

“It means we will immediately stop losing jobs to our competitors who have cut their own deals and we can start creating hundreds of thousands of new jobs for Americans.”