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US Trade Deficit Rises to Record High in 2000
The US trade deficit rose to a new record high of 369.7 billion dollars in 2000, even though imports fell for the last three months of the year, the Commerce Department announced Wednesday.
The Commerce Department said the trade deficit hiked by 39.5 percent in 2000 as compared to the previous year, setting the third annual record in a row for the past three years.
America's exports shot up by 11.7 percent to 1.07 trillion dollars, surpassing the one-trillion-dollar mark for the first time in the nation's history. The increase resulted in the main from strong worldwide demand for farm products, automobiles and industrial materials.
The imports for the whole year, however, climbed up at an even faster pace of 17.8 percent to 1.44 trillion dollars, mainly caused by growing oil prices in the world market. The United States siphoned a record 3.4 billion barrels of crude oil from abroad last year, with an average price at 26.41 dollars per barrel, the highest level since 1984.
Nonetheless, the deficit had slid down for a succession of three months from the all-time monthly high of 33.8 billion dollars in September. The December's figure was 33 billion dollars in red ink, as compared to 33.1 billion dollars in November and 33.6 billion dollars in October.
US trade deficit with Japan jacked up to a record 81.3 billion dollars while the deficit with Western Europe expanded to an all-time high of 59.8 billion dollars. The trade deficit with Canada, America's largest trading partner, increased to a record 50.4 billion dollars, and the red ink with Mexico, another partner in NAFTA, also boosted to a record 24.2 billion dollars.
While some experts voiced worry over the growing trade deficit, many others see the trade gap as a sign of robust economic growth.
"The trade deficit is not a problem to be fixed but a symbol of America's global economic strength -- a Good Housekeeping seal of approval from the world's investors," said Daniel Griswold, associate director of the Cato Institute's Center for Trade policy Studies.
Griswold said that last year the American economy attracted foreign capital "like a powerful magnet," "allowing American consumers and businesses to buy 370 billion dollars more than we sell."
"Expanding trade deficits are almost always a sign of economic expansion and robust investment. Research shows that bigger trade deficits go hand in hand with faster growth, falling unemployment, higher industrial output and declining poverty," he noted.
Griswold said, "Today's Commerce Department report only confirms the link between the trade deficit and economic performance. When the economy was steaming along in early 2000, the deficit grew. When the economy stalled late in the year, the trade deficit began to shrink."
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