JANUARY TRADE DEFICIT IS $58.2 BILLION

Imports and exports hit all-time highs in January as imports came in at $206.4 billion with exports totaling $148.2 billion. With the price of oil at $107.52 this morning and consistently closing over $100 per barrel, expect March to set a new record for imports.

From The New York Times:

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, where prices skyrocketed to the loftiest on record, figured into the increasing demand for overall imports.

The trade gap widened even as exports of U.S.-made goods and services totaled a record high of $148.2 billion in January. The declining value of the U.S. dollar, relative to other currencies such as the euro, is helping to make U.S.-made goods cheaper and thus more attractive to foreign buyers.

TRADE DEFICIT FALLS IN 2007

After five consecutive years of record trade deficits, the deficit shrank 6% in 2007.

From the Commerce Department's Press Release at the Bureau of Economic Analysis:

For 2007, exports of $1,621.8 billion and imports of $2,333.4 billion resulted in a goods and services deficit of $711.6 billion, $46.9 billion less than the 2006 deficit of $758.5 billion. For goods, exports were $1,149.3 billion and imports were $1,964.9 billion, resulting in a goods deficit of $815.6 billion, $22.7 billion less than the 2006 deficit of $838.3 billion. For services, exports were $472.5 billion and imports were $368.5 billion, resulting in a services surplus of $104.0 billion, $24.2 billion more than the 2006 surplusof $79.7 billion.

The goods and services deficit was $711.6 billion in 2007, down from $758.5 billion in 2006. As a percentage of U.S. gross domestic product, the goods and services deficit was 5.1 percent in 2007, down from 5.7 percent in 2006.

TRADE DEFICIT RISES EVEN AS EXPORTS INCREASE

From AP via MSNBC:

The U.S. trade deficit rose to the highest level in three months, with record oil prices and a flood of toys and other imports from China swamping a solid gain in American exports.

The Commerce Department reported Wednesday that the deficit for October increased to $57.8 billion, the highest level since July and 1.2 percent above the September imbalance.

The widening deficit was slightly worse than expected and occurred even though U.S. exports of goods and services rose for an eighth consecutive month, climbing 0.9 percent to an all-time high of $141.7 billion. This gain was offset by a 1 percent rise in imports to $199.5 billion, also a record, as a surge in global oil prices sent America’s oil bill soaring.

WTO INVESTIGATING POSSIBLE VIOLATIONS BY CHINA

From USA Today:

The World Trade Organization opened a formal investigation Friday into allegations by the USA and Mexico that China is providing illegal subsidies for a range of industries, officials said.

The North American countries accuse Beijing of using WTO-prohibited tax breaks to encourage Chinese companies to boost exports, while imposing tax and tariff penalties to limit purchases of foreign products in China.

"China is providing numerous subsidies that appear to be prohibited under WTO rules," U.S. trade lawyer Juan Millan told the WTO's dispute body last month. "China offers tax refunds, reductions and exemptions that discriminate against imported products ... or that subsidize China's exports."

The U.S. trade deficit set a record for the fifth consecutive year in 2006 at $765.3 billion. The imbalance with China grew to $232.5 billion, the highest ever with a single country.

Beijing, meanwhile, blocked a separate probe of its rules for protecting intellectual property rights. But the move will probably only delay the creation of a panel until the next meeting of the WTO's dispute body in September, when Washington can bring up the issue again.

Under WTO rules, a second request for an investigative panel is automatically granted.