The U.S. trade deficit reached $43.5 billion in March, jumping from February's $40.4 billion, the Commerce Department reported Tuesday.

The deficit was the second-highest ever, beating Wall Street expectations and trailing only the $44.9 billion reported in December. The swelling trade gap is one reason the Bush administration has recently indicated that a strong dollar might not be its first priority.

Some of the dollar's recent weakness might be showing up in the trade ledger, but not enough to offset rising imports. According to the report, exports grew for the third month in a row in March, but imports rose almost five times as fast, increasing by 2.9% from February to $126.3 billion. Notably, imports of industrial supplies, such as crude oil and plastics, rose to a record $28.3 billion.

Meanwhile, comments made Monday by Treasury Secretary John Snow led traders to believe that the administration was privately welcoming some depreciation of the dollar in order to try and boost exports. But publicly, the administration has supported a strong dollar policy.

The U.S. trade deficit with Mexico and Canada reached record levels of $3.9 billion and $5.2 billion, respectively, in March. With oil producing nations, including Saudi Arabia and Venezuela, the U.S. trade deficit reached an all-time high of $5 billion.

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