The US trade deficit widened in March to its second highest level on record, as a sharp rise in oil prices ahead of the war in Iraq boosted the value of US crude petroleum imports to a record $9.1 billion, the US Commerce Department said yesterday.
March imports from Opec nations were a record $6.5 billion, pushing the US trade deficit with those countries to an additional record of $5.0 billion. The overall trade gap was $43.5 billion, up 7.6 per cent from February and well above expectations for March.
Analysts had pegged the latest monthly figures on average at $40.8 billion.
The report put additional pressure on the dollar, which has been in a decline since February 2002. In early trading, the dollar was down modestly against the euro, the common currency for the European Union.
The widening trade gap also reflects a jump in overall imports to $126.30 billion, which was second only to the record of September 2000 record of $126.33 billion.
The sharp rise in oil and other industrial materials imports was followed by smaller increases of consumer goods and autos and auto parts. Imports from Western Europe hit record levels in March, even as France and Germany were strongly opposed to US efforts in the UN to win a second resolution authorising the use of force against Iraq.
US exports to Western Europe were the highest since May 2001. Strained relations over the war have triggered threats of consumer boycotts on both sides of the Atlantic. But much US-European trade is done within companies, lessening the impact that boycotts could have on the overall trade figures. US exports increased only fractionally in March to $82.8 billion, although shipments to China hit a record $2.4 billion.
"It's kind of hopeful that we're seeing a modest increase in exports, which is better than the declines we had seen earlier. So perhaps the weaker dollar is beginning to support exports," said Jade Zelnik, chief economist with RBS Greenwich Capital Markets.
The March trade deficit with Mexico was a record $3.9 billion, while the deficit with Canada was the highest since January 2001.