Balance Of Trade

A Barbie doll is for sale at the Anaheim Toys "R" Us store in a bright cardboard-and-cellophane box labeled "Made in China." The price is $9.99. But how much will China make from the sale of the pert fashion doll marketed around the world by Mattel Inc. of El Segundo? About 35 cents, according to executives in the Asian and American toy industry--mostly in wages paid to 11,000 young peasant women working in two factories across the border from Hong Kong in China's Guangdong province.

The U.S. trade deficit shot up nearly 10% to $36.4 billion in November, hitting its highest point since last January, the Department of Commerce said Tuesday. But even as imports soared, exports also grew -- for the seventh straight month. And some cheered the greater trade activity. "Today's numbers are a welcome sign of economic growth and increasing consumer demand," Commerce Secretary Gary Locke said. But one economist likened the situation to increasing a credit card balance by $100 a month, eventually leading to poverty.

The Commerce Department on Wednesday set preliminary anti-dumping duties of as much as 210% on millions of off-road tires from China that it said were being sold in the United States at unfairly low prices. The tires were the sixth Chinese product to be hit with U.S. anti-dumping duties since the start of the year. The others include nails, certain steel pipe, a teeth-whitening ingredient and laminated woven sacks used to package items such as dog food and bird seed.

U.S. consumer sentiment fell in early November amid a grim outlook for future job prospects, while a larger-than-expected trade deficit has economists scaling back estimates for third-quarter economic growth. The Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for November fell to 66.0, the lowest level since August, from 70.6 in October and well below economists' median expectation of a reading of 71.0, according to a Reuters poll. "Importantly, the decline in confidence was already in place before the announced increase in the unemployment rate to 10.2% on Nov. 6," the Reuters/University of Michigan Surveys of Consumers said in a statement, adding that "the likelihood that the sentiment index would drift even lower in the months ahead cannot be easily dismissed."

Tracking Trade and the Peso: A clue as to whether Southern California exporters are adjusting to the effects of Mexico's peso devaluation will be presented Wednesday when the U.S. Department of Commerce releases July balance of trade figures. Local exporters who had been reaping big rewards from the North American Free Trade Agreement have been hammered by the Mexican currency crisis that began last December.

Japan Air Lines, which already owns more Boeing 747s than any other airline in the world, Thursday placed firm orders for 20 of the latest 747-400s and took options on 34 more in a transaction that could ultimately be worth $9.34 billion. If all of the options are exercised, the last of the planes would delivered in 1999. JAL has already taken delivery of five 747-400s and is awaiting delivery of 15 others from an earlier order. The orders will give an important boost to the U.S.

Led by General Motors, Ford and Boeing, the nation's top exporters had a banner 1987, as a cheaper dollar pushed overseas sales up and in turn helped chip away at the trade deficit, Fortune magazine says. Exports by Fortune's 50 top-ranked companies rose 8% to nearly $80 billion last year, while total U.S. exports jumped 11% to $253 billion, the largest one-year increase this decade, the magazine said in its July 18 issue. And more encouraging, the trend shows no sign of abating.

The nation's trade deficit surged 77% in March as consumers stepped up their purchases of imported goods and overseas sales of U.S. products sagged, the Commerce Department reported Wednesday. The March deficit of $5.8 billion was a sharp setback, coming a month after the trade shortfall had dropped to its lowest level in nine years.

Japan's trade minister urged the chief executives of 302 leading manufacturers Tuesday to help reduce the country's stubborn trade surplus by importing more foreign products, even if it means buying more goods from their own overseas operations.

Friday's news that the trade deficit narrowed in August shows the silver lining from dollar's steep drop. The greenback has been declining relative to other major currencies for months. Concerns are growing that foreign investors might curtail their investments in dollar assets. But so long as the slide remains gradual and orderly, economists generally view it as a plus for the U.S. economy. Though a weak dollar makes imported goods such as oil more expensive, it boosts the competitiveness of U.S. exporters, helping to rebalance an economy that has been skewed away from exports for years.

The U.S. trade deficit fell to the lowest level in nearly six years in December as the recession depressed demand for imports. In 2008, the trade deficit fell for a second straight year and economists expect an even bigger decline this year. The Commerce Department said Wednesday that December's deficit fell 4% to $39.9 billion from $41.6 billion in November. That was higher than the $36 billion deficit economists expected. For the year, the deficit shrank 3.3% to $677.1 billion.

The U.S. trade deficit edged down in August as foreign oil imports retreated from a record high the previous month, a drop that more than offset a setback in exports. The Commerce Department said Friday that the trade deficit declined by 3.5% in August to $59.1 billion, the smallest imbalance since June. The deficit is expected to shrink even further in coming months as a severe economic slump in the U.S. depresses demand for oil and other imported goods.

The deficit in the broadest measure of American trade widened in the spring, reflecting a big jump in the country's foreign oil bill. The Commerce Department on Wednesday reported that the current account trade deficit increased 4.3% to $183.1 billion in the April-June quarter, compared to a revised deficit of $175.6 billion in the first quarter.

U.S. steel pipe manufacturers, who have been battling a surge in imports from China, won a major victory Friday when the International Trade Commission cleared the way for the imposition of stiff penalty tariffs for the next five years. The commission voted 5 to 0 that the U.S. industry was being harmed by the import of circular steel pipe. The decision marked the first time a U.S. industry had won a decision to impose tariffs on a Chinese product based on the argument that the Chinese government was unfairly subsidizing an industry.

China's overall trade surplus shrank 10% in May from a year earlier, though its contentious gaps with the United States and Europe continued to expand -- suggesting more trade tensions ahead. Meanwhile, the government also reported Wednesday that China's index for producer prices, an indicator of inflation, jumped 8.2% in May, the fastest rise in more than three years, thanks to higher costs for oil and other raw materials compared with a year earlier.

Mexico had its first monthly trade surplus in more than four years in February, according to preliminary figures compiled by the central bank. It is a sign that one of the anticipated benefits of the devastating peso devaluation may be emerging. Analysts and U.S. government officials said the speed with which the turnaround in trade apparently occurred suggests that Mexico ultimately may be able to pull out of its economic nose dive.

An ancient Chinese proverb begins with the observation that "a horse cannot gain weight if not fed with extra fodder during the night." In that same spirit, China's economy is putting on the pounds, importing huge amounts of material from around the globe as it tries to make the transition from socialism to capitalism -- all while still being ruled by the Communist Party. The rise of China as an exporter is, of course, well established.

The Bush administration has declined to cite China for manipulating its currency to gain unfair trade advantages against the United States. The finding came despite pressure in Congress for penalties because of America's growing trade deficit with China, which last year hit an all-time high of $256.3 billion. The administration said China needed to address the "substantial undervaluation" of its currency compared with the dollar.

The United States' trade deficit grew larger in January as imports -- including crude-oil prices -- zoomed to all-time highs. The latest snapshot of trade activity, reported by the Commerce Department on Tuesday, showed that the country's trade gap increased to $58.2 billion. That was up from a trade shortfall of $57.9 billion in December and was the highest since November. Imports of goods and services climbed to a record high of $206.4 billion in January. The United States' voracious appetite for imported crude oil, with prices skyrocketing to the loftiest on record, figured into the increasing demand for overall imports.