The Commerce Department Reports that U.S. Trade Deficit
Soared to an All-Time High of $725.8 Billion in 2005
The record amounts of dollars that are flowing into foreign hands to pay
for imports are being invested in U.S. stocks, bonds and other investments. Economists
worry that if foreigners suddenly decide they want to hold fewer U.S. assets, they
could send the value of the dollar, stocks and bonds all plunging. (How much
leverage are they applying on the Bush Administration? Study the facts on Chinese
imports and Arab Oil.)
The trade deficits have contributed to the loss of nearly 3 million manufacturing jobs
since mid-2000 as U.S. companies moved production overseas to lower-waged nations. Many
economists believe those manufacturing jobs will never come back.
Last year, imports rose by 12.9 percent to an all-time high of $2 trillion, swamping a
10.4 percent increase in exports, which reached a record high of $1.27 trillion.
For December, the trade deficit edged up a slight 1.5 percent to $65.7 billion, the third
highest monthly figure on record.
The $201.6 billion U.S. trade deficit with China was the highest ever recorded with any
country. It was up 24.5 percent above the previous record deficit of $161.9 billion with
China set in 2004.
The United States ran up record deficits with much of the rest of the world including
Japan, the European Union, OPEC nations, Canada, Mexico and Central and South America.
The chief culprit in pushing the deficit up last year was record global oil prices and
increased U.S. demand because of a loss of Gulf Coast production following Hurricane
Katrina. The U.S. foreign oil bill soared to a record $251.6 billion, up 39.4 percent from
2004.
Imports of other consumer goods including foreign autos hit record levels as well, a
development that is causing major woes for U.S. automakers.
Analysts predicted that the 2006 trade gap will be even worse
Back
to Bush Borders Ports |
