Data released by the US Commerce Department shows that the country’s trade deficit has become the highest in 2010 in over a decade.
The trade deficit – the difference between exports and imports, was recorded at $497.8 billion in 2010, a jump of 32.8% over 2009 and the biggest annual rise in a decade.
Imports from China were recorded at $364.9 billion, the highest in history.
The deficits grew by 5.9% in December alone to $40.6 billion, after cost of importing oil went up following a global surge in crude prices. The average price of crude climbed up to $74.66 a barrel in 2010 from $56.93 barrel in 2009.
Imports by the US had fallen to a eight year low in 2009 as the country’s imports had dropped. However, the trend was reversed in 2010 and total goods and services imported by the US rose by 19.7% to $2.33 trillion, indicating economic recovery and resulting higher spending by consumers.
However, the country managed to increase its exports by 16.6% to $1.83 trillion in 2010. The country will be able to achieve President Obama’s target of doubling exports by 2015-16 if it manages to maintain the current momentum.
Trade imbalance with China was up by 20.4% and hit an all time high of $273.1 billion. This is the highest deficit the US has witnessed with a single country. Exports to China were far lower and were recorded at $91.9 billion.
US have been engaged in a bitter trade dispute with China, which it accuses of keeping the currency low artificially. This gives Chinese companies unfair advantage over imports – making imports more expensive in the Chinese market.