U.S. Trade Deficit Expands - NYTimes.com The American trade deficit widened to $48.8 billion in December, the largest imbalance since June, although exports from the United States to Europe grew, the Commerce Department said Friday. Imports rose 1.3 percent, largely because the United States bought more foreign autos, auto parts and industrial machinery. Exports increased 0.7 percent. And exports to Europe rose 7.2 percent. That followed November's decline of more than 6 percent. Europe consumes nearly one-fifth of America's exports. Some economists fear the continent may already be in a recession. "With the danger that the euro zone enters a deep recession still very real, weaker demand from Europe will weigh on US export growth both this year and next," said Paul Dales, senior United States economist with Capital Economics. For the 2011, the deficit climbed to $588 billion, the highest level since 2008. Both exports and imports rose to all-time highs. Economic growth weakens when exports decline because factories tend to produce fewer goods. The economy grew at an annual rate of 2.8 percent in the final three months of 2011. For 2011, it expanded by just 1.7 percent, roughly half the rate in 2010. For the year, the deficit with China climbed to an all-time high of $295.5 billion, up 8.2 percent from the previous record set in 2010. Both imbalances were the largest ever recorded with a single country. Those deficits, coming at a time of high unemployment, have ignited calls in Congress for a crackdown on what critics see as unfair Chinese trade practices like the country's undervalued currency.