WASHINGTON — The U.S. trade deficit widened in June as sales of American-made goods to other countries declined by a larger amount than imports, reflecting the impact of a global slowdown.
The Commerce Department reported Friday that the trade imbalance increased by 3.3 percent to $29.4 billion in June, matching many analysts' expectations.
Investors' concerns about profits prompted a price plunge on Wall Street. By late morning the Dow Jones industrial average was down 130 points and the NASDAQ index was off 56 points.
Exports of goods and services fell by 2 percent to $86 billion in June as economic turmoil overseas sapped demand.
That decline comes as U.S. manufacturers complain that the value of the dollar is too strong, making their goods expensive abroad. They have been pressing the Bush administration to take steps to change that.
Meanwhile, imports of goods and services, hurt by flagging demand because of the ailing U.S. economy, declined in June by 0.7 percent to $115.4 billion.
"This report shows a synchronous global slowdown is occurring," said Jay Bryson, global economist for First Union. In the months ahead, Bryson says, both exports and imports will probably remain sluggish.
June levels of both exports and imports were the lowest since February 2000.
For May, the deficit was revised to $28.5 billion, slightly larger than the government's previous estimate.
The latest snapshot of trade activity comes as President Bush seeks unilateral authority to negotiate any trade accord on behalf of the United States, something Congress refused to give former President Bill Clinton.
Bush faces stiff opposition on Capitol Hill for such "fast-track" trade authority. Many lawmakers want to condition further trade liberalization on improving environmental and labor standards abroad.
White House officials say fast-track authority would help the sagging economy by lifting tariffs that discourage other countries from buying American goods and services.
But organized labor and other critics contend jobs would be lost and the environment would suffer if Bush were given unfettered power to negotiate trade deals.
Through the first six months of this year, the trade deficit swelled to $184.9 billion, compared with $178.1 billion during the same period last year. For all of last year, the deficit mushroomed to a record $375.7 billion.