–Lunar New Yr Ending Boosts Gap W/ China to -$21.7b; W/Japan -$7.1b

By Joseph Plocek

WASHINGTON (MNI) – U.S. March trade data probably will not affect
Q1 GDP estimates much, with a widening in the gap mainly reflecting the
assumed resumption of flows after the Asian lunar new year.

The March trade balance printed -$51.8 billion (slightly worse
than private economists expected) after a revised -$45.4 billion in
February. After the revisions the data are almost in line with what
the Commerce Department assumed for goods in Q1 GDP.

Imports jumped $11.7 billion in March as lunar new year ended. The
imports advance in March 2011 was only about $9 billion and the advance
in March 2010 about $6 billion. This growth from prior years shows the
effects of world recovery.

Exports rose $5.3 billion in March in a rebound. The goods deficit
(-$66.6 billion) was the highest since October 2008 as a result of this
combination. Imports and exports both set new records.

Imports had broad gains. These included computers at +$1.1 billion,
pharmaceuticals +$1 billion, autos +$1.2 billion, television and
telecommunications +$1 billion in total, and oil-related products +$2.2
billion as prices and volume both rose.

Oil prices since have fallen, and this should lower imports ahead.

The exports advance was about half due to +$2.24 billion for
aircraft engines. Elsewhere foods printed +$0.5 billion, fuel and
chemical re-exports +$1.2 billion, pharmaceuticals +$0.4 billion,
and autos and parts +$0.4 billion.

Unadjusted, the trade gap by country included: China at -$21.7
billion after -$19.4 billion in February, Japan -$7.1 billion (highest
since April 2008) after -$7 billion, and OPEC -$9.1 billion after -$6.4
billion. Trade volumes with Mexico, Canada, and Europe reached new
records.

Overall, the data show a growing demand for overseas products.

In a separate report the Commerce Department said related-party
trade accounted for 40.5% of goods trade and increased by 14.6% over the
2011 year. The percentages are within historic norms.

Related-party trade includes trade by domestic parent firms with
subsidiaries abroad and by U.S. subsidiaries with foreign parent
companies. The bulk of this trade is centered on Canada and Mexico, with
smaller values for China (mainly reflecting imports), Japan and
the Netherlands (exports). Those five areas combined accounted for
almost 80% of related-party trade in 2011.

**MNI Washington Bureau: (202)371-2121**

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