The Census Department reported that the U.S. trade deficit declined to its lowest level in a year, to $56.5 billion, but the trade deficit with China rose to an all-time high of $27.8 billion.

Half of the U.S. trade deficit is accounted for by China. A rough estimate holds that fully 10 percent of the annual trade deficit between the U.S. and China is accounted for by one company – Wal-Mart.

Wal-Mart reported a 9.8 percent rise in profits for the third quarter while other retailers struggled. Wal-Mart has benefited from its low-price position as shoppers cut back on discretionary purchases and seek bargains.

How does Wal-Mart get the lowest price? In significant measure, by sourcing production of its goods in China.

The Wal-Mart effect may partially explain the seeming disjunction between the U.S.’s failing economy, shrinking overall trade deficit, and yet growing trade gap with China. The worse things get in the U.S., the more Americans are relying on goods “made in China” just to get by.

[Read](http://www.salon.com/tech/htww/2008/11/13/walmart_china_and_trade/index.html “Read”) (Salon.com)