US trade deficit soars to $16.99bn

THE US trade deficit soared to a record $16.99bn in January as exports of US goods fell and imports of steel and manufactured goods soared.

The bilateral deficit with China showed a particularly big rise, up from $3.98bn in December to $4.88bn in February. Steel imports from China jumped by 65 per cent. The deficit with Japan narrowed from $5.88bn to $4.66bn, but the overall trade gap was about $2bn wider than analysts had expected.

The yawning gap between imports and exports is likely to slow US economic growth significantly during the year. Figures on consumer prices showed them rising by just 0.1 per cent in February, taking the annual inflation rate to 1.6 per cent. The benign inflation outlook means the Federal Reserve is expected to leave US interest rates unchanged.