Trade Deficit Hit Record Level In 2006

The US Department of Commerce today
reported a record trade deficit of $763.6 billion in 2006: Trade with China accounted for $232.5
billion of that; and textiles and apparel $83 billion. Of the textiles and apparel deficit, China
accounted for $29.6 billion — an increase of 17 percent over 2005. The increase in the overall
trade deficit occurred despite a 12.75-percent increase in exports.

Manufacturing trade associations immediately claimed the deficit is an example of “broken US
trade policy.”

“Our escalating US trade deficits and concomitant loss of 3 million US manufacturing jobs
are a direct outgrowth of US trade policy,” said Auggie Tantillo, executive director of the
Washington-based American Manufacturing Trade Action Coalition. “The government’s refusal to use
access to the US market as trade negotiation leverage gives other countries like China a green
light to subsidize and protect their industries to the detriment of US producers.” He warned the
offshoring of key US manufacturing will only accelerate unless Congress forces changes in trade

February 13, 2007