The U.S. Trade Gap Won’t Go Away

(BusinessWeek.com) — The U.S. trade deficit shrank like a puddle in the hot sun in 2008 and 2009 as appetite for imports melted in the recession and Asian export markets grew. With the U.S. economy now improving, the gap is widening again, dashing hopes that the U.S. is anywhere close to rebalancing trade with the rest of the world. On Apr. 30 the Commerce Dept. announced that the economy grew at an estimated annual rate of 3.2 percent in the first three months of the year, propelled by stronger consumer spending and business investment. The bad news is that a lot of that consumption and investment went for imports. While exports grew at a 5.8 percent rate, imports grew at an annual rate of 8.9 percent. Overall, the trade deficit nicked 0.6 percentage points from the growth rate.

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