February 22, 2000
Diamond Imports Help Bulge Trade Deficit
Imports of diamonds, foreign-made cars, television sets and other products pushed up the U.S. trade deficit a staggering 65% last year to an all-time high of $271.31 billion, according to Reuters.
The Commerce Department said the deficit contracted to $25.55 billion in December, compared with a gap of $27.10 billion in November, as imports surged to an unprecedented $110.72 billion. December exports rose to a record $85.17 billion, as aircraft shipments increased.
Volatile oil prices were also a major factor in the rise in the deficit.
The report gives fresh ammunition to protectionist forces in the U.S. ahead of next November's elections. They see surging imports as a threat to American jobs, and have urged Congress to reject a market-opening agreement with China. U.S. exports to China declined while imports surged.
The market reaction was muted, as the trade deficit eased more than expected in December. Wall Street analysts had expected the deficit to register $26.4 billion.
- by Mark E. Dixon