WASHINGTON (AP) -- The U.S. trade deficit jumped to a two-year high in April, as sales of exports declined and imports surged to a record high.
The Commerce Department says the deficit rose to $47.2 billion in April, up 6.9% from an upwardly revised March deficit of $44.2 billion.
Exports dropped for the fourth month out of the past five, falling 0.2 percent to $195.4 billion. Meanwhile, imports climbed 1.2 percent to an all-time high of $240.6 billion, reflecting record levels for shipments of foreign-made cars, food, computers and other goods.
A wider trade deficit can act as a drag on growth because it means U.S. companies are earning less from their overseas markets. But the wider deficit can also indicate rising U.S. demand.
Said Alliance for American Manufacturing (AAM) President Scott Paul:
"The rising trade deficit may be the worst economic news we’ve seen so far this month.
"There is no doubt that surging imports from South Korea have led to layoffs in steel mills in Texas and Pennsylvania this week. And there’s also no doubt in my mind that these steel products were dumped into this market, in violation of America’s trade laws.
"Japan and South Korea accounted for $8.3 billion of our trade deficit in April. Both nations are strong allies of the United States, but that does not entitle them to a blank check to manipulate currency, subsidize industries, block our exports, or dump their products into our market. The Obama Administration should refocus its trade efforts on enforcement actions.
"China does not deserve a blank check either. On this 25th anniversary of the slaughter of pro-democracy advocates in Tiananmen Square by the Chinese military, it’s worth remembering that expanded bilateral trade has done nothing to move China in the direction of more democracy and human rights. In many ways, our bilateral trade deficit with China, which soared to $27.3 billion in April, enables Beijing’s tools of oppression. Congress and the Administration are right to commemorate this day, but what’s really needed is a bolder policy on trade with China."
