American deficit a record

Press, 9 August 1985, Page 6

American deficit a record

NZPA-AP Washington The United States’ foreign trade deficit hit a record $U533.4 billion ($63.46 billion) from April through June as oil imports surged and farm exports dropped off, the United States Government reported yesterday. The Commerce Department said that the trade deficit had grown 12.8 per cent from the first three months of the year, when the gap between imports and exports was $U529.6 billion ($56.24 billion).

The latest statistic was certain to heighten calls for Congressional action to protect domestic manufacturers from the flood of imports. But the Commerce secretary, Mr Malcolm Baldrige, repeated the position of the Reagan Administration that the proper way to deal with the country’s trade problems was to reduce the value of the dollar by getting Government Budget deficits under control.

“The Budget resolution recently passed by the Congress is only a first step and further cuts in spending must be enacted to bring the deficit under control,” he said.

Huge Budget deficits have kept United States interest rates at higher than normal levels thus attracting overseas investment, which has in turn kept the dollar high.