U.S. Trade Deficit in 1998 Was Worst Ever

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February 20, 1999

U.S. Trade Deficit in 1998 Was Worst Ever


WASHINGTON -- The U.S. trade deficit soared 53 percent last year, to a record high of $168.8 billion, the Commerce Department reported on Friday, as the global financial crisis helped to produce the first decline in U.S. exports in more than a decade.

Political sensitivities to the fast-rising trade deficit are increasing -- particularly in hard-hit industries like steel -- even while consumers benefit from low-cost gasoline, computer chips and electronic goods. This year the trade imbalance is expected to widen even further, especially if Japan remains mired in its deepest recession since World War II.

Most of the increase in the deficit, U.S. officials said, came from remarkably strong consumer spending for foreign-made goods. But the deficit for December narrowed unexpectedly, to $13.8 billion, a 10 percent decline from November.

Not surprisingly, the biggest increases in the trade deficit originated from the hardest-hit nations of Asia. The deficit with Japan rose to $64 billion, up from $56 billion in 1997, bringing it back to the levels that touched off some of the fiercest trade tensions with Japan a decade ago. Those have been alleviated recently by the continuing strength of the U.S. economy, which has muted the 1980s accusations that Japanese imports were taking American jobs. The trade deficit with China rose to $56.9 billion, the highest with any nation other than Japan, a 15 percent increase from the previous year.

Trying to put the best face on a deteriorating trade balance, a senior Commerce Department official said on Friday that there were signs of a "spotty recovery" of U.S. exports to Asia, particularly to South Korea and Singapore. But both are relatively small markets, and overall in 1998 the trade deficit with all Pacific Rim nations totaled $160.3 billion, up from $121.7 billion in 1997...

-- pshannon (pshannon@inch.com), February 20, 1999


Debt is my biggest concern about Y2K. Even if Y2K is "just a bump in the road", it may be enough to cause an economic collapse. If it were not for the world's debt load (with the US leading the way), I would not be so concerned about Y2K.

Rubin was recently telling the Europeans that they need to boost imports, much like he used to tell Japan. Didn't work in Japan...

-- Anonymous99 (Anonymous99@Anonymous.com), February 20, 1999.

Not only that, but out of the G7 industrialized nations, the United States has the least "efficient" economy. In other words, the ratio of exports to imports is the lowest. In most of these nations, the ratio is around 1.0 - 1.25. In the U.S. it is around .75, which makes me wonder how we can be so rich and giving money away to other countries.

-- (@@@.@), February 20, 1999.

Thanks, ps, THIS is why we need to keep up with what's happening in other countries. If there are problems in other countries it will affect the US one way or another.

-- Old Git (anon@spamproblems.com), February 20, 1999.

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