The U.S. trade deficit, bloated by a record demand for foreign oil, worsened dramatically in January, climbing to $9.3 billion, the government said today. The Commerce Department said the January deficit was 20.5 percent larger than December's $7.7 billion imbalance. Most of the deterioration came from a 44 percent surge in oil shipments. The January deficit was an ominous beginning for the new decade. Many analysts believe America's trade woes will worsen in coming years as U.S. dependence on foreign oil grows. For January, exports climbed to an all-time high of $32.1 billion, 4 percent above the December level. However, this gain was swamped by a 7.3 percent surge in imports, which increased to $41.3 billion. The trade deficit, the difference between imports and exports, was the largest since a $10.1 billion imbalance in November. At the White House, presidential spokesman Marlin Fitzwater said the January increase showed export growth has been outpacing growth in imports. ``These numbers are pretty much as expected due to the deficit drop in December, which was the lowest in five years. Everyone seemed to realize they couldn't maintain that low level, and so it was expected that there would be an increase in January,'' Fitzwater said. The U.S. trade deficit has been improving for the past two years, falling to $109 billion last year, down 8 percent from 1988. But many economists predicted the 1990 deficit could begin rising again because of the oil bill and gains in the value of the dollar. A stronger U.S. currency makes imports cheaper for Americans and U.S. products less competitive on overseas markets. The huge 44 percent surge in oil imports did not come as a surprise, with analysts blaming the rise on December's record cold weather, which caused oil companies to import heavily in January to restock depleted supplies. The total volume of oil, 291,278 barrels, was an all-time high, topping a previous record set in August. Prices shot up to $20.13 per barrel, pushing the total oil bill to $5.86 billion, the highest total dollar amount snce August 1982, a month when the volume was less but the price per barrel was higher. The American Petroleum Institute has reported that foreign oil accounted for a record 54 percent of consumption in January as domestic production fell to its lowest level in a quarter century. Another factor swelling the deficit in January was a 31 percent surge in imports of clothing, which totaled $3.1 billion in January. As usual, the deficit with Japan was the largest of any country. However, at $2.9 billion, it was at the lowest level since December 1984. The Bush administration has been pressing the Japanese to do more to purchase U.S. exports as a way of reducing the huge annual deficit of $49 billion that America is running with Japan. Other big deficits included Taiwan, $1.2 billion; China, $800 million; Canada, $600 million, and the countries of Western Europe, $300 million. Many economists are worried that the deficit will worsen even further in coming months. Michael Evans, head of a Washington forecasting company, said he was looking for the deficit for all of 1990 to total between $120 billion and $125 billion, which would make it the second worst imbalance on history. The all-time high was a $152.1 billion deficit in 1987. ``Without a weaker dollar, we are just not going to get an improvement in trade,'' Evans said. ``We are destined to have bad trade numbers for some time.'' Such a forecast could spell trouble for the Bush administration, which is counting on further gains in exports to help boost the fortunes of American manufacturers and dampen protectionist sentiments in Congress. Last month, President Bush held a hastily arranged meeting in California with Japanese Prime Minister Toshiki Kaifu to press demands that Japan do more to reduce its trade gap with the United States, which amounted to $49 billion last year. Kaifu promised to make reduction of trade tensions a top priority, but U.S. critics question whether the verbal commitments will be turned into significant market-opening moves. Sen. John Danforth of Missouri, the ranking Republican on the Senate trade subcommittee, said Monday that Japanese officials he met with in Tokyo last week appeared to be more willing to address U.S. complaints about their closed markets. ``There was a recognition that the time had come to redress the grievances we had,'' said Danforth, who has been a leading critic of both Japanese trade practices and the way Bush and former President Reagan addressed them. But Danforth told reporters, ``I remain skeptical that the ... talks are going to lead to the kind of concrete results we hope for.'' He said the talks will have to produce more specific sales of U.S. products to Japan as well as a broader general commitment by Tokyo to removing impediments.
