US trade gap narrows despite record chasm with China

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WASHINGTON, Aug 15 (AFP): The US trade deficit narrowed in June from the prior month, despite a politically sensitive record gap with China, as a weak dollar buoyed exports, the government said yesterday.
The trade deficit shrunk 1.7 per cent to a four-month low of 58.1 billion dollars in June, the commerce department said. That overturned economists' consensus forecast that it would increase to 61 billion dollars.
The better than expected performance in June came despite surging oil prices and in the context of a soft dollar that made US exports a comparative bargain.
But Americans showed no signs of a waning appetite for cheap Chinese-made goods, despite protests from some US lawmakers that China is keeping its yuan currency undervalued to maintain an unfair trade advantage.
The gap with China, which holds the lion's share of American imports, expanded to a record 21.16 billion dollars in June from 20.02 billion in May, the commerce department said.
US exports to China rose to a record high of 5.9 billion dollars.
Meanwhile, the value of crude oil imports climbed to 19.6 billion dollars at 60.95 dollars per barrel, up from 59.36 dollars in May.
The June levels were the highest since September 2006, when Americans imported 19.7 billion dollars' worth of crude at 62.40 a barrel.
The China numbers as usual drew protests from critics who say President George W Bush should get tougher with the Asian giant on trade.
"The damage grows larger each month, as the Bush administration dallies and ignores the corrosive consequences of the trade deficit," said Peter Morici, an economics professor at the University of Maryland.