The U.S. trade deficit grew in October as both the volume of oil exports and our trade deficit with China surged to a record highs. A widening deficit means the United States will not be able to rely on trade to help pull the economy out of what may be the longest recession in the post-World War II era.

The U.S. trade deficit grew to $57.2 billion in October, a 1.1% increase from $56.5 billion in September. Imports fell 1.3% to $208.9 billion, but exports fell even further, dropping 2.2% to $151.7 billion - the lowest level since January.

On reason for the reason for the larger deficit was more lopsided trade with China. The trade gap with China increased to a record $28 billion, up from $27.8 billion in September. China last year supplanted Canada as the largest source U.S. imports. Since joining the World Trade Organization in 2001, China has

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The a title=hilary target=_blank href=http://thecaucus.blogs.nytimes.com/2008/12/02/clintons-selection-the-view-from-china/Chinese are pleased /awith the appointment of Hilary Clinton as Obama's Secretary of State. brbrThe Chinese remember that Bill Clinton paved the way for China to gain entry into the World Trade Organization and assume that Ms. Clinton will be equally as friendly. brbrbr

TODAY: Obama not yet committed to missile defense plan, giving Kremlin hope of more flexible relationship; Medvedev and Obama speak; Kremlin to all but ignore Bush administration; Russia to soften trade measures to smooth path to WTO; Russia and Venezuela form development bank; OSCE monitors blame Georgia; Communist marches, anti-corruption, presidential pardons. Foreign Minister Sergei Lavrov has voiced his optimism on foreign policy relations under Barack Obama, amidst news that Dmitry Medvedev and the new president-elect held an amicable telephone conversation over the weekend. The Russian government reportedly believes that the new US administration could be persuaded to abandon plans to station a missile defense shield in Poland, and reports indicate that Obama has not given Poland a definitive answer on the shield. Despite a meeting between Lavrov and Condoleezza Rice over the weekend, the ...

Will November’s emergency global financial summit result in a “new global financial order”? European leaders are pressing for a fundamental change in the US-centric monetary system. Jason Simpkins says a similar crisis meeting in 1944 gave birth to the Bretton Woods gold standard. But there are reasons to doubt such a major reform this time around.

This from Money Morning:

The leaders of 20 of the world’s most developed nations, the G20, will convene in Washington D.C. on Nov. 15 for an emergency financial summit considered by many to be the 21st century version of the Bretton Woods initiative of 1944. This will be the first chance for European leaders – many of whom blame the current financial contagion on U.S. free market capitalism run – to press for an overhaul of a global financial system the United States has dominated for more than 60 years.

The summit will

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TODAY: Putin pledges South American support, Russia offers $1 billion loan to Venezuela; former Soviet states urge UN and Nato vigilance, tensions continue on both sides; Ukraine could charge Russia for use of Black Sea port; Communists displeased over Solzhenitsyn tribute. Prime Minister Vladimir Putin demonstrated his willingness to prioritize relations with Latin America as it was revealed that Venezuela would receive a $1 billion Russian loan to fund arms purchases. President Dmitry Medvedev has hinted that the presidential role carries too much power. Putin apparently thinks that the World Trade Organization has lost the desire to accept Russia as a member. In a move likely to further aggravate Nato, Putin is calling for an open border between Russia and South Ossetia. Former German Chancellor Gerhard Schroder has warned Nato that ...

A post-script to my post earlier in the week about being realistic over a free trade agreement with America. I pointed out the aggression and venality of US farmers when it comes to ‘free trade’. I suggested the lobbyists were powerful and would try to block access to any significant exports to America.

Here was the initial response from the National Milk Producers Federation. It called for the full exclusion of New Zealand’s dairy products from the P4 trade agreement. Not just a few extra tariffs or quotas. Full exclusion. I’ll let them hang themselves below.

“The real change as a result of a so-called Trans-Pacific trade agreement between these nations and the U.S. would be to throw open American markets to one large multinational company that works under the auspices of the New Zealand government. New Zealand is the world’s largest dairy exporter, and

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TODAY: Medvedev says EU summit “double-edged”, calls Saakashvili a “political corpse”, and threatens to terminate WTO agreements; Putin warns of Russian response to Nato warships; Turkey plays down disagreements. Meet the minigarchs. President Dmitry Medvedev called the European Union’s emergency summit “double-edged”, criticizing it for threatening to postpone talks on a new cooperation agreement, but praising the decision not to impose economic sanctions. Medvedev says Russia will terminate some agreements “soon” if no headway is made towards its accession to the World Trade Organization. Prime Minister Vladimir Putin has promised that Russia will respond - “calmly” - to the presence of Nato warships in the Black Sea. “Anybody who thinks Russia's confrontation with the West is another Cold War has been misled,” says Yulia Latynina. Francis Fukuyama writes in the Financial ...

The Russian government is to spend an extra $4.1 billion supporting agriculture through 2012 and is considering slashing meat imports. “Russia's agriculture minister said Moscow could cut poultry and pork import quotas by hundreds of thousands of tons, hitting American producers hard and thereby raising prices for American shoppers.” Despite its markets paying a heavy financial penalty for its actions in Georgia, Russia's international reserves rose to $581.5 billion last week after a $400 million boost. Following China’s lead, Russian steel prices are set to drop from the end of this year. German industry groups have expressed concern that Russia’s rift with the west could damage business relations. The BBC has compiled a summary of trade interests between Russia and Britain. Russia says it will not be ready to lower tariffs and liberalize trade until it ...

TODAY: Medvedev to decide on Georgia’s breakaway republics today amid US criticism; Russia says that breaking ties with Nato would be “no great loss”, and may block a supply route through Afganistan; Putin sees WTO commitments as a “burden”. Powerful Russia would balance China? A plea from Russia’s parliament for the country to back independence for Georgia's two breakaway republics of Abkhazia and South Ossetia was voted for unanimously, and the plea will be considered at a meeting this morning, with President Dmitry Medvedev having the final say. The US has urged Russia not to recognize the rebel areas. “More important than the parliamentary vote is Mr Medvedev's statement yesterday that breaking off all relations with Nato would be no great loss for Russia.” Russia may also suspend an agreement allowing ...

I just talked to the always-excellent Bill Caiaccio on CNN Radio. I made some notes for the interview, but of course, once we got talking we went off where his questions led us. Here are my notes ...

Geopolitical events are driving oil prices. Russia blocked the entrance to Georgia’s main oil port, and Russia is showing that it can control Europe’s natural gas supply. The neocons in Washington seem to be hoping for a new cold war with Russia, and they just might get it. Unfortunately, fear of such a cold war add to the price of oil.

Supply and demand is also in play.

Drawdown of gasoline stockpiles in US was more than twice expectations -- 6.3 million barrels. Demand destruction may have been short-term. Since prices have pulled back, people may be driving again.

Chinese demand dipped during the

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