The overall U.S. trade deficit declined in 2007 after setting records for five straight years. The improvement came despite a huge jump in the bill for foreign oil and another record deficit with China. The Commerce Department reported Thursday that the deficit dropped by six percent in 2007 to more than $711 billion. The trade deficit with China rose by 10 percent as demand remained strong for Chinese imports despite a string of high-profile recalls of tainted products.

Even with the improvement, critics of the Bush administration's free trade policies say the overall deficit is nearly double what it was when the president took office.