WASHINGTON -- The U.S. trade deficit soared again in May, as the U.S. economy pulled in more and more manufactured products from abroad while the weak dollar did only a little to spur foreign buying of U.S. goods and services by the still sluggish economies of Europe and Japan.
The Commerce Department reported yesterday that the shortfall between exports and imports climbed to $9.17 billion from $8.53 billion in April. U.S. imports rose 1.2 percent, to a record $65.45 billion, while exports grew only two-tenths of a percent from April, to $56.27 billion.
The trade deficit with Japan actually fell in May by almost 20 percent, to $4.39 billion, but economists say that is largely a seasonal phenomenon, not a harbinger of change. The figure has declined in May each of the last four years, only to come roaring back in subsequent months.
Monday, in fact, Japanese officials in Tokyo, who get their trade data out sooner than Washington does, released their statistics for June, which showed the imbalance in trade with the United States sharply widening again.
Yesterday, Clinton administration officials met at the White House to rethink trade strategy with Japan.
Officials are saying that unless there is some movement out of Tokyo in the next 10 days, they will set in motion trade sanctions on Japan for its failure to meet a July 31 deadline to open its public contracts market for medical equipment and telecommunications.
The U.S. deficit with Japan for the first five months of this year is still 10 percent ahead of last year's pace, at a total $24.9 billion -- although Japanese products are more expensive with the weak dollar and the strong yen.
The deficit with Japan remained by far the nation's largest and accounted for just under half the total U.S. trade deficit.
If there is good news for the U.S. economy in these trade numbers it is that U.S. exports to Japan for the first five months of this year are up 8 percent, with healthy increases across the board in consumer goods, machinery and autos.
The reason these exports have not improved the overall trade balance with Japan is because U.S. imports from Japan are up 9.3 percent over the same period, despite the steadily weakening dollar and strengthening yen.
The trade gap with China also ballooned in May, jumping to $2.22 billion from $1.79 billion in April. While much attention has been focused on Japan, the United States had a record $22.8 billion trade deficit with China last year, and the deficit with Beijing is up 22 percent on that level already this year.
The trade gap with the newly industrialized Asian countries widened by $525 million, to $1.1 billion, and the deficit with Western Europe surged from $83 million in April to $1.43 billion in May.
The sluggish European economies simply are not buying as they used to from the United States, while U.S. imports from them remain very healthy. The trade deficit with Germany is now the largest it has been since December 1988.