NEW YORK, Feb 12: The United State's trade deficit soared to $725.75 billion in 2005. Massive inflow of goods from China to American markets has led to this imbalance. The Congress already jittery over the imbalance will call for China taking measures to reduce the yawning gap. The trade imbalance in 2005 was 17.5 per cent more than the 2004 gap.
The income from the farm sector in the USA dropped by 23 per cent. The drop came after two years of boom. The rising cost of fuel, fertiliser and credit have combined to hasten this slowdown. Farm income in 2006 will be $56.2 billion compared to $72.6 billion in 2005 and $ 82.5 billion in 2004. There are about two million farmers in US.
Meanwhile, auto sales in China recorded a 70 per cent rise overtaking Japan as the second largest auto market in the world after the USA. Car dealers in China sold 340,000 vehicles in January up from 194,907 vehicles a year earlier. China's car market has surged as incomes rise and car prices fall. More than 5.89 million cars were sold in China in 2005.
Against the backdrop of poor performance by giant US car manufacturer Mazda, the Japanese auto-maker posted a net profit of 39 per cent. Mazda recorded a profit of $85.9 billion in the quarter ending in December. The German automaker Volkswagen reported a 61 per cent rise in its profit in 2005 but announced that it would eliminate over 20,000 jobs.
The German automakers are the highest paid in the world. Volswagen's net income rose to $1.34 billion in 2005 compared to $697 million in 2004. The General Motors, the giant US automakers sustained a loss of $8.6 billion in 2005. The company earned a profit of $2.8 billion in 2004. Ford, another US giant, announced it was closing down 14 plants and eliminating 30,000 jobs. Toyota, which is staking its claim to be the largest automaker in the world in the wake of recent debacles in Ford and GM posted a profit of 34 per cent on strong global sales. Toyota's operating profit was $4.1 billion. Toyota due to disruption of production in its Bangalore plant in India has shut down the factory.
In another development, a former Wal-Mart vice-chairman pleaded guilty to fraud and tax charges admitting that he stole money, gift cards and merchandise from the company. He faces the prospect of a 28 years jail term and a fine of $1.5 million.
In yet another case of fraud among the top echelons of the corporate world in US a former senior executive of the Citigroup have agreed to pay $2.7 million to settle a dispute. He was charged with disposing off his share in an unlawful manner.
In a separate development, politicians and union activists in Europe prevented Mittal Steel of India, known as the largest steel company in the world, from acquiring Arcelor the second largest steel company in the world.
In yet another development, the American Red Cross, most prestigious of the relief organisation, has been accused of lacking transparency and accountability in the maintenance of its funds. It is now facing an enquiry by the Senate Finance Committee. Federal Emergency Management Agency (FEMA) has also been the target of the congressional probings. Similar charges like that of the Red Cross has been levelled against the FEMA. FEMA is likely to undergo a complete overhaul in the wake of its inept handling of the devastation left by Hurricane Katrina in the Gulf coast of US.