U.S. trade gap expands 5.3% to over US$52 billion for December 2006, fuelled by higher oil prices and record imports of foreign autos and other consumer imports.
America's commerce department reported that the U.S. annual trade deficit hit a new high in 2006, continuing a five-year streak.
A flood of relatively inexpensive imports from China as well as record prices for oil imports are compelling reasons behind the U.S. trade deficit's 6.5% rise to over US$650 billion.
The good news is that American exports are also increasing, although at a slower rate than imports. At its simplest level, this trade imbalance results in an accelerating U.S. deficit. Yet stronger foreign economies coupled with a weaker American dollar helped U.S. exports in 2006 to rise to a record US$1.2 trillion, up 12.6% from 2005. U.S. exports grew at a faster rate than the 10.5% for American imports in 2006. However, the final amount of U.S. imports last year was greater, specifically US$1.9 trillion.
According to John Ward of the Canadian Press, merchandise exports from Canada to the U.S. in 2006 declined, the first annual decrease in three years. Canadian exports to the U.S. made up 79% of total foreign revenues, down from 81% in 2005. Canadian autos and forestry products saw the greatest declines.
Canadian exports rose 1.1% in 2006 to US$392 billion.
Imports into Canada climbed nearly four times faster than exports, and hit a record US$346 billion. Increased foreign imports reduced Canada's trade surplus by US$9.5 billion to US$46 billion, the lowest Canadian trade surplus since 1999.
Canada's US$82 billion trade surplus with the U.S. in 2006 is the lowest annual Canadian surplus with America since 2003.
