Record imports helped by car purchases from Japan and falling exports pushed the US trade deficit up sharply in July, the US Commerce Department said yesterday. The Department said the shortfall in US trade with the rest of the world jumped 24.7 per cent in July to $10.34 billion (£6.89 billion) from $8.29 billion in June, much higher than the $9.4 billion deficit expected by Wall Street economists.

US Commerce Secretary Mr William Daley put a positive light on the trade picture, saying the United States has been performing well given the slower economic growth among its top trading partners. But he had some tough words for Japan.