Trade deficit widens on high oil prices

For the second straight month, record-high exports weren't enough to hold the U.S. trade deficit in check as the gap widened behind the highest oil prices in more than two years. 

The March trade deficit increased 6 percent to $48.2 billion, more than expected and the highest level since June 2010 and up from a revised $45.4 billion in February, the Commerce Department said Wednesday. 

Exports increased to $172.7 billion, up from a revised $165 billion, ahead of the previous record of $165.7 billion in July 2008. 

Imports were up 4.9 percent to $220.8 billion, the highest level since August 2008, from $210.4 billion, with oil imports soaring to $39.3 billion, an 18 percent jump from the previous month.

A barrel of crude oil cost an average of $93.76 in March, up from $87.17 in February and has eclipsed $100 a barrel since then, hitting its highest level since September 2008, the Commerce Department said. 

Oil closed at about $104 per barrel on Tuesday.

Excluding petroleum, the trade gap shrank to $16.9 billion from $20 billion in February, Commerce said. 

The dollar's decline in recent months is making U.S. goods cheaper and more competitive while exports are increasing behind fast growth in the world's developing countries. 

The trade deficit with China decreased to $18.1 billion, slightly below the $18.8 billion reported in February. 

The deficit between the U.S. and China will probably rise through this year, with China's exports rising rapidly and imports falling, which could put pressure on Chinese leaders to let its currency rise. 

Although China had allowed its currency to appreciate during the past year, Treasury Secretary Timothy Geithner encouraged China to let the yuan appreciate faster, which critics have argued has been kept artificially low to benefit Chinese exporters. 

"We hope that China moves to allow the exchange rate to appreciate more rapidly and more broadly," he said on Tuesday following two days of meetings in Washington with Chinese officials. 

The most recent report showed that, overall, U.S. firms sold more autos, industrial materials and food, feed, beverages and consumer goods in March. 

Auto and auto part exports rose to $11.6 billion from just below $10 billion in February, according to Commerce.