The U.S. trade deficit narrowed in January to the lowest level in six years on tumbling American demand for everything from OPEC oil to Japanese automobiles. Imports fell faster than exports, shrinking the gap by 9.7 percent to $36 billion, the Commerce Department said today in Washington. Excluding petroleum, the deficit was little changed at $21.3 billion. The credit crunch gripping the financial system is causing demand throughout the world to slump as consumers and businesses pull back. What’s shaping up to be the biggest plunge in global trade in 80 years is adding to pressure on the Obama administration to rework international agreements and include protections for U.S. workers and the environment. “It’s not a good report for U.S. manufacturing,” said Julia Coronado, a senior U.S. economist at Barclays Capital Inc. in New York, which forecast the deficit would narrow to $35.5 billion. “This is certainly a sign that the global weakness is feeding into the domestic economy through the export channel.” The trade gap with China increased to $20.6 billion from $19.9 billion in the prior month as U.S. exports to the nation dropped faster than imports. China has used some of the dollars it accumulates through trade surpluses with the U.S. to purchase American government debt, making it the largest owner of Treasuries. Treasuries Fall Treasuries dropped today after Chinese Premier Wen Jiabao said he is “worried” about the country’s holdings of the securities and wants assurances that the investment is safe. Benchmark 10-year note yields rose to 2.96 percent at 8:39 a.m. in New York from 2.86 percent late yesterday. The trade gap was projected to narrow to $38 billion from December’s $39.9 billion, according to the median forecast in a Bloomberg News survey of 72 economists. Projections ranged from $31 billion to $44.5 billion. The global economy is likely to shrink for the first time since World War II, and trade will decline by the most in 80 years, the World Bank said this week without providing a specific estimate. The narrower gap is not good news for the U.S. economy because it mainly reflected the drop in petroleum prices. The numbers used to calculate gross domestic product, which eliminate the influence of prices, showed the trade deficit widened to $44 billion, the most since October. Four-Year Low Imports slumped 6.7 percent to $160.9 billion, the fewest since March 2005, paced by a $4.3 billion plunge in purchases of crude oil. Demand for foreign automobiles dropped by $3.3 billion. The deficit with OPEC dropped to $3.9 billion, the smallest since November 2003, and the gap with Japan shrank to the lowest level since January 1998, as U.S. imports fell to an almost 16- year low. An even bigger concern for the U.S. economy is the slump in foreign demand for American-made goods. Exports decreased 5.7 percent to $124.9 billion, the lowest level since September 2006, as sales of automobiles, semiconductors, telecommunications gear and drilling equipment dropped, today’s report showed. Technology Workers National Semiconductor Corp., the maker of chips for the five largest mobile-phone makers, said it plans to cut more than 1,700 jobs, or about 25 percent of its workforce. “The worldwide recession has impacted National’s business as demand has fallen considerably,” Chief Executive Officer Brian Halla said in a March 11 statement. “The actions we announced today will help us remain competitive.” Boeing Co., the world’s second-largest commercial jet- maker, said it delivered 19 aircraft to buyers abroad in January, down from 27 the previous month. U.S. gross domestic product is forecast to contract again this quarter after shrinking at a 6.2 percent annual pace from October to December, the most since 1982. A collapse in U.S. exports led to a widening in the trade gap that subtracted a half percentage point from growth last quarter. The trade gap with Canada, the U.S.’s biggest trading partner, narrowed to the lowest level since May 1999, and the deficit with Mexico was the smallest since January 2002. The shortfall with the European Union was cut in half from $7 billion in December to $3.5 billion the following month.

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