US trade gap widens to $60 billion in May as dollar dips

13 Jul 2007


Mumbai: The US trade deficit widened in May to $60 billion, despite strong export growth aided by a weak dollar, as record high oil prices lifted imports to an all-time high, government data showed.

The May trade gap was up 2.3 per cent from a revised deficit of $58.7 billion for April, the US commerce department said.

US imports rose 2.3 per cent in May to $192.1 billion, as the country''s oil import bill leapt to $19.0 billion - the highest since September - and imports of capital goods such as telecommunications equipment and computers hit a record.

Overall goods and services exports rose 2.2 per cent to a $132.0 billion, led by a $1.9 billion increase in shipments of civilian aircraft and other capital goods and record exports of consumer goods and industrial supplies.

Rising exports, however, are helping to narrow US trade gap on an annual basis and providing a boost to domestic economic growth.

The trade deficit, which hit a record $758.5 billion in 2006, totaled $295.5 billion for the first five months of 2007, against $317.8 billion in the same period last year.

Average prices for crude oil imports rose more than $2 per barrel to $59.36, the highest since $62.40 in September. US imports of oil from the Organisation of Petroleum Exporting Countries increased nearly 10 per cent to a record $14.6 billion.

Meanwhile, US trade deficit with China widened 3.3 per cent in May to $20.0 billion and reports suggested the June gap could be larger.

China said it posted a record trade surplus of $26.9 billion last month as exporters rushed to ship goods ahead of a cut in government export tax rebates.

China''s overall surplus for the first six months of 2007 was $112.5 billion, up 83 per cent from the same period last year. China''s trade surplus with the US was $73.9 billion, or about two-thirds of the total.

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