US trade deficit grows in March

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The US trade deficit rose in March for the first time since July, as sales of exports fell amid the global recession.

The deficit, the difference between what the US exports and imports, grew to $27.7bn (£24.6bn) from $26.1bn in February, the Commerce Department said.

The value of exports fell 2.4% to $123.6bn, the lowest level since August 2006. Imports fell 1% to $151.2bn.

The politically sensitive deficit with China increased to $15.6bn in March from $14.2bn in February.

Earlier China reported that its export sales in April were down 22.6% on the same month a year ago.

China has been the country with the largest trade surplus with the US for more than a decade.

There have been repeated calls in Congress for a crackdown on what critics see as unfair trade practices in China.

'Permanent drag'

Economists had forecast an even larger increase in the trade deficit to $29bn.

Some experts believe the size of the deficit outweighs any benefits from the government's $787bn stimulus package, aimed at boosting the economy.

"At 2.4% of GDP, the trade deficit subtracts more from the demand for US goods and services than President Obama's stimulus package adds," said Peter Morici, former chief economist at the US International Trade Commission.

"Moreover, the lift from the Obama stimulus is temporary, whereas the drag from the trade deficit is permanent."