Feb. 10 (Bloomberg) -- The U.S. trade deficit widened to a record for a fourth straight year in 2005 as Chinese imports poured in and energy prices jumped to their highest ever.

American companies imported $726 billion more goods and services than they exported last year, the Commerce Department said today in Washington. The shortfall in December increased to $65.7 billion from $64.7 billion a month earlier.

Improvement in the trade deficit this year may prove difficult because the U.S. economy is stronger than most of its trading partners, economists said. China accounted for more than a quarter of the total U.S. deficit last year, the most for any country, eliciting a chorus of criticism from lawmakers about the Asian nation's trade and currency policies.

``There is still significantly stronger growth in the U.S. relative to the rest of the world,'' said John Shin, an economist at Lehman Brothers Holdings Inc. in New York. ``That's been the dominant factor in terms of continued large trade deficits and that's not going to change much this year.''

Imports in December rose to a record $177.2 billion, boosted by overseas shipments of business equipment, industrial supplies, motor vehicles and consumer goods including electronics. Exports also increased, to an all-time high of $111.5 billion.

``We need to get the trade balance under control,'' U.S. Trade Representative Rob Portman said in an interview from the White House today. ``But it's also an indication of a healthy economy'' in the U.S.

Budget Deficit

The Treasury Department today reported the first consecutive monthly budget surpluses in three years. The $21 billion surplus last month followed an $11 billion surplus in December.

Even as the strong economy boosts tax collections, the White House still forecasts a record $423 billion deficit this year. Mounting trade and budget deficits mean the U.S. will have to depend that much more on overseas investors to fund them.

The trade deficit last year was a record 5.8 percent of the economy, up from 1.3 percent a decade earlier. The December deficit with China narrowed 11.9 percent to $16.3 billion from $18.5 billion the previous month. The gap with China last year was a record $202 billion, compared with $162 billion in 2004.

The deficit with China has tripled since President George W. Bush took office, spurring legislation on Capitol Hill from lawmakers who say he hasn't done enough to open markets.

``There will be a continuous talk, but I think as far as passing legislation, I don't see it coming this year,'' Richard Shelby, an Alabama Republican and chairman of the Senate Banking Committee, said in a Feb. 8 interview in Washington.

Buffett, Soros

Democrats in the U.S. House of Representatives yesterday proposed a measure that would establish a congressional office where companies can bring their trade complaints. If that office determines the grievance to be valid, it would ask Portman's office to file a World Trade Organization case.

Berkshire Hathaway Inc. Chairman Warren Buffett and George Soros are among investors predicting that a widening trade gap will weaken the dollar even after the U.S. currency rallied last year. Bigger deficits mean more dollars need to be converted into other currencies to pay for imports.

The dollar recovered from an initial decline against the euro today. It appreciated 14.4 percent against the 12-nation currency in 2005 and climbed 14.7 percent versus the yen. Buffett has described his bet against the dollar as ``very long term'' and is calling for the U.S. to make imports more costly and do more to promote exports.

Lawmakers claim that China keeps the value of its currency artificially low, giving it an unfair advantage by making Chinese goods cheaper abroad. Shelby, chairman of the Senate Banking Committee, said that Treasury Secretary John Snow should name China a currency manipulator.

Yuan

The yuan has barely risen since July, when China let the currency strengthen 2.1 percent against the dollar, the first gain in a decade. The yuan rose to 8.0505 today and has appreciated 0.7 percent since the July 21 revaluation.

Economists expected the December deficit to widen to $65 billion from the originally reported $64.2 billion in November, according to the median of 60 estimates in a Bloomberg News survey. The monthly deficit was the third-largest ever.

Imports of consumer goods in December rose by $1.8 billion, led by televisions, stereo equipment and pharmaceuticals. Overseas shipments of automobiles increased $498 million during the month, while imports of capital goods rose $815 million, reflecting more shipments of computers and industrial machinery.

Imports

Companies such as Toshiba Corp., Japan's second-largest chipmaker, are benefiting from an expanding U.S. economy and an improving labor market. Toshiba said sales rose 16 percent in the quarter ended Dec. 31 on demand for flash memory chips used in mobile phones and portable music players such as Apple Computer Inc.'s iPod.

Imports of industrial supplies increased $138 million to $49 billion, reflecting more shipments of iron and steel, lumber and aluminum. Imports of petroleum declined as the average price and volume fell.

The value of imported petroleum products, which include crude oil and refined products, fell to a seasonally adjusted $23.6 billion from $24.7 billion. The price of a barrel of crude oil averaged $49.76 in December, compared with $52.16 in November, and down from the post-Hurricane Katrina high of $70.85 on Aug. 30. The U.S. imported 311.5 million barrels of crude oil in December, compared with 314.4 million barrels in November.

The record trade bill last year was owed in part to a surge in crude oil prices which were the highest ever.

Exports

U.S. exports of capital goods, which include civilian aircraft, rose to $32.3 billion from $32.1 billion in November. Exports of industrial supplies, such as chemicals and fuel oil, increased to $20 billion from $19.4 billion.

Exports of consumer goods rose to $10.6 billion from $9.9 billion, and exports of automobiles and parts increased by $403 million.

The government estimated on Jan. 27 that the December deficit was about $65.5 billion when it calculated fourth- quarter growth, according to economists at Lehman Brothers Inc. The economy grew at a 1.1 percent annual rate in the final three months of last year.

The U.S. economy may grow 3.4 percent this year after expanding 3.5 percent in 2005, based on a survey of economists last month from Blue Chip Economic Indicators. By comparison, economists in the Blue Chip survey expect Japan to grow 2.4 percent and countries that use the euro to expand 1.9 percent.

To contact the reporters on this story: Joe Richter in Washington jrichter1@bloomberg.net

Last Updated: February 10, 2006 16:03 EST