WASHINGTON, Oct 14: The US trade deficit boomed to $54 billion in August, the second biggest in history, as the country was swamped by high-priced oil and Chinese-made goods.

The total gap grew 6.9 per cent from July to a seasonally adjusted $54.0 billion in August - $1 billion short of the record posted two months earlier, the Commerce Department said.

The scale of the deterioration surprised analysts, who had expected a deficit of about $51.5 billion. "The US trade deficit is above $50 billion for the third month in a row," said CDC Ixis economist Rene Defossez.

"Oil is one explanation of this poor performance: since last June, oil prices are on a rapid upward trend. The growth gap between the US and its main trading partners is another explanation."

Imports rose solidly, gaining 2.5 per cent to $150.7 billion, but US exports were flat, edging up just 0.1 per cent to $96.0 billion, the Commerce Department said. A breakdown of the raw, unadjusted, data showed that the shortfall with members of the Organization of Petroleum Exporting Countries (Opec) surged 17.4 per cent to a record $7.0 billion. With China, the US deficit rose 3.3 per cent to a record $15.4 billion.

With Canada, the trade deficit expanded 12.7 per cent to $6.6 billion. In trade with Japan, the US shortfall was flat at $6.4 billion. The gap with the 25-nation European Union shrank 9.2 per cent to $9.6 billion.

Overall, the American petroleum deficit widened 11.7 per cent to a record $14.1 billion in August. Crude oil imports gained 10.3 per cent to 331.2 million barrels as the average price of a barrel soared 9.3 per cent to a 23-year record $36.37 a barrel.

"Oil is sucking an awful lot of income out of the economy, that is for certain, and there is also a troubling slowdown in our export activity," said Joel Naroff, president of Naroff Economic Advisors.

"You put the two of those together and you have got some additional uncertainties as far as the economy goes." Flat US exports could be an early sign that the high world oil prices were crimping foreign economic activity, especially in Europe, he said.

"The higher oil prices I am sure are kicking them in the head just as much as they are doing here. It has got to be a real worry in Europe. This may be an indication that it is becoming an issue."

The huge US deficit with China, meanwhile, appeared set to carry on widening, Naroff said. "China is shipping everything they possibly can here and the reality is that their markets are not open enough, broad enough or deep enough to buy enough from us," he said. "That is just a reality that ultimately will have to be dealt with. It is a political issue as much as a trade issue." -AFP