US trade deficit widens

Stronger domestic demand lifted US imports in December to the highest level in three years, the US Commerce Department reported Friday.

Spurred by improving economic activity, imports of goods in December grew by $2.7 billion (2.04 billion euros), to reach an annual total of $2.7 trillion for 2011.

US exports rose 0.7 percent in December, driven by growing sales of petroleum, services and advanced technology goods.

"Thanks to a weak greenback, exports [in December] rose for the first time in a few months and were up 9 percent from a year ago," Jennifer Lee, economist at BMO Capital Markets told AFP news agency.

The pickup in US exports, however, failed to prevent the country's trade deficit from widening to $48.8 billion in December.

For the whole of 2011, the trade gap increased by 11.6 percent to $558 billion – the highest shortfall since 2008.

Cheap Chinese imports

Half of the US trade deficit is due to a 9.4 percent increase in imports from China. Goods worth a record $399.3 billion were imported from that country in 2011, reinforcing concerns in Washington about Beijing's currency and trade policies.

US lawmakers believe that China deliberately undervalues its currency to gain an unfair price advantage.

Last year, legislation aiming to force China to raise the value of its currency, passed the US Senate, but was blocked by the House of Representatives.

However, China wasn't the only country to blame for the widening US trade gap last year as deficits with the European Union and Canada also expanded.

uh/nk (Reuters, AFP)