Trade deficit ticks up to $42.2 billion

By Vicki Needham - 12/11/12 09:42 AM ET

The trade deficit ticked up in October as imports fell but outpaced exports, which is a drag on the economy's expansion.

The gap widened to $42.2 billion, up 4.2 percent from the $40.3 billion posted in September, the Commerce Department reported on Tuesday.

Exports were down 3.6 percent to $180.5 billion from $187.3 billion in September, while imports fell to $222.8 billion, a decrease of 2.1 percent from $227.6 billion.

Meanwhile, the deficit with China hit another record high, up to $29.5 billion in October — an increase from $29.1 billion.

On Monday, Obama administration officials announced dates for the next meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT).

U.S. Trade Representative Ron Kirk and Acting Commerce Secretary Rebecca Blank will meet with Chinese Vice Premier Wang Qishan on Dec. 18 and 19 in Washington.

"The JCCT is critical to resolving important trade and investment issues for American stakeholders and to moving our trade relationship with China forward," Kirk said.

"This year we're focused on delivering meaningful results on issues including enforcement of intellectual property rights, combating pressures to transfer technology, eliminating trade-distortive industrial policies, and removing key obstacles to our exports."

Agriculture Secretary Tom Vilsack will address key agricultural trade concerns.

China was the largest supplier of U.S. goods imports in 2011, and the third-largest market for U.S. exports in 2011, after Canada and Mexico.

The United States and China meet regularly about nagging issues in their trade relationship.

To that end, Lael Brainard, Treasury's under secretary for International Affairs, is in Beijing through Tuesday to meet with China’s senior government officials following U.S. and Chinese elections.

Brainard is discussing ways to expand opportunities for U.S. workers and businesses. She also will discuss China’s efforts to rebalance its economy.

Also, tensions flared over the weekend between the United States and Russia when Moscow issued a ban on imported meat products treated with ractopamine, a growth-enhancing drug used by U.S. producers.

U.S. officials say the new ban appears to be in violation of Russia's World Trade Organization (WTO) rules. Moscow joined the group in August and Congress followed last week by granting permanent normal trade relations (PNTR) to Russia. President Obama is expected to sign the measure this week.

The ban is the first of what is expected to be several retaliatory moves against the United States for passing the trade bill that contains a human-rights provision that would punish anyone involved with the death of whistleblower lawyer Sergei Magnitsky, who died in prison.

On Monday, Russian legislators were lining up additional measures, including denying visas to U.S. citizens who harm adopted Russian children, according to news reports.