Why Hasn't a Weak Dollar Slowed Imports? Maybe Because America Needs Them
By LOUIS UCHITELLE
Published: April 8, 2005
....This winter, ships, planes and trucks coming from abroad...carried (Prius cars), extra loads of costume jewelry from Austria and China; front-loading washing machines from Germany; tires from the Far East; refrigerators from Mexico and South Korea; and computers from China.
These are among the imports that have increased most quickly in recent months, helping to swell the January import bill to $159.1 billion, a record for any month. That comes after the 2004 trade deficit reached a record $617 billion.
Just when, at least in theory, imports should be falling or at least leveling off in response to a dollar that no longer buys as much in euros, pounds and yens, they have continued to surge. Imports now equal 16 percent of the nation's overall economic output, up a full percentage point in one year. They represented only 11 percent of the gross domestic product a decade ago. But while imported finished goods like costume jewelry and clothing are what most people notice most, what they do not see is even more significant.
The biggest change is that American companies increasingly import many of the parts and components that go into the products they make in the United States, drawing on the global economy to supply what they once made at home.
So when factories raise their production, as they are in the currently robust economy, foreign-made parts and components flow into the country in ever greater quantities. Exports also grow, but imports are rising faster, and the American trade gap widens....
http://www.nytimes.com/2005/04/08/business/08imports.html
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