Widening trade gap

Amy Scott Sep 12, 2006
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Widening trade gap

Amy Scott Sep 12, 2006
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MARK AUSTIN THOMAS: Later this morning we’ll get the U.S. trade deficit numbers. The deficit is the difference between what we buy from other countries and what we sell them. Analysts think the gap hit around $65 billion in July. Marketplace’s Amy Scott says the deficit numbers could put pressure on China to make some changes.


AMY SCOTT: While the U.S. continues to run multi-billion dollar trade deficits, China just reported a new record surplus. Last month China exported nearly $19 billion more in goods than it imported.

U.S. Treasury Secretary Henry Paulsen makes his first official visit to Beijing next week. Some expect him to urge China to raise the value of its currency.

That would make Chinese goods more expensive and perhaps level out the trade imbalance. But C. Fred Bergsten with the Institute for International Economics expects China will eventually come to that conclusion on its own.

C FRED BERGSTEN: As the Chinese see their growth rate exceeding even their own desires, I think there’s an overwhelming case in purely internal Chinese terms for a substantial revaluation of the currency.

It may be a while. Last week China’s finance minister blamed globalization and other countries’ policies for its trade surplus, not its cheap currency.

In New York, I’m Amy Scott for Marketplace.

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