JOHN SNOW, the US Treasury Secretary, last night renewed demands for Europe and Japan to boost growth to ease global economic imbalances after America’s trade gap surged to a monthly record of $60 billion (£32 billion) in November.

A slump in US exports, blamed on weak demand in key trading partners, combined with a sharp rise in America’s oil imports to trigger the surprise jump in the trade deficit. Wall Street analysts had expected it to decline to $54 billion.

The much worse than predicted figures sparked a renewed assault on the dollar on foreign exchanges, sending the US currency tumbling against the yen and the euro.

The dollar’s losses pushed the euro up more than 1 per cent to levels around $1.3292. The pound gained more than a cent and a half to close in London at $1.8932.

Mr Snow blamed the latest jump in the trade deficit on the relative strength of US growth compared with a disappointing performance by the eurozone and Japan. He said: “We are growing faster than our trading partners and we are creating more disposable income than they are. We need Europe to be more of an engine of growth and we need Japan to be more of an engine of growth.”

The Treasury Secretary made clear that he would use next month’s London meeting of finance ministers from the Group of Seven leading industrial economies to step up pressure on the governments of Japan and the eurozone to act to bolster their performance.

The weakness of overseas demand for US goods was underlined by the 2.3 per cent drop in American exports in November, which affected most categories of products. Shipments of industrial supplies and materials, such as plastics and chemicals, were particularly badly affected, while exports of capital goods tumbled by 5.1 per cent.

The deficit was also exacerbated by a 1.3 per cent rise in imports driven mainly by increased US demand for crude oil from abroad, despite cheaper world oil prices. US consumer demand for household products and other goods also helped to boost imports.

Strong demand for advanced technology saw the US deficit on trade in these goods widen to a record $5.8 billion.

Analysts said that the November data left the US firmly on course to register a record trade gap for the year, with the deficit in the fourth quarter set to climb above 6 per cent of GDP for the first time, after a figure of 5.6 per cent in the previous three months.

The US trade shortfall for the first 11 months of last year already totals $561.3 billion — well above the record $496.5 billion set for 2003 as a whole.

Paul Ashworth, of Capital Economics, said that although the dollar’s slide over the past three years had so far failed to boost US exports and cut the deficit, eventually this would happen.

However, he said that “unfortunately, the damage has already been done” to US economic performance, with trade set to subtract 1.5 percentage points from annualised American growth in the fourth quarter. This is now set to come in at about 3 per cent.

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