WASHINGTON – The U.S. trade deficit (search) widened more than expected in August to its second-highest level on record, fueled by the highest oil import prices in 23 years and record imports from China, the U.S. government said on Thursday.
The monthly trade gap totaled $54.0 billion, expanding nearly 7 percent from a revised estimate of $50.5 billion for July. Analysts surveyed before the report had estimated the August deficit at $51.5 billion. The trade gap hit an all-time high of $55.0 billion in June.
U.S. imports from the Organization of Petroleum Exporting Countries (search) hit a record $8.9 billion, while the trade deficit with those countries widened to a recor August to $36.37, the highest level since June 1981.
Strong world demand and fears of supply disruptions have been pushing up world oil prices, with U.S. crude market prices reaching record territory well above $50 per barrel in recent weeks.
The politically sensitive trade deficit with China widened to a record $15.4 billion in August, as imports hit a record $18.1 billion.
The Bush administration has been stymied so far in its effort to persuade China to move more flexible exchange rate policies, a step that U.S. manufacturers said would help reverse the growing bilateral gap.
The Commerce Department (search) report gives Democratic presidential candidate John Kerry new ammunition in his bid to unseat President George W. Bush when voters go to the polls on Nov. 2. Kerry blames the huge and growing trade gap on Bush's economic policies and his alleged failure to aggressively enforce U.S. trade agreements.
The Bush administration argues the trade deficit reflects the strength of the U.S. economy that is pushing demand for imports.
U.S. imports increased 2.5 percent in August to a record $150.1 billion, led by the rise in oil prices. Exports rose fractionally to $96.0 billion, the second highest on record.