America’s trade imbalance with China is continuing to worsen, according to statistics released in February by the Foreign Trade Division of the U.S. Census Bureau.

In 2007, the trade deficit with China (exports minus imports) passed the quarter trillion dollar mark: $256.3 billion. U.S. imports from China set a new record: $321.5 billion. That’s the equivalent of $1,068 of Chinese goods for every man, woman and child in America, though even that figure is a way-below-wholesale price; it’s what U.S. companies paid to Chinese enterprises. Meanwhile, U.S. exports to China also rose, to an estimated $65.2 billion, though it consisted mostly of raw materials, parts and machines.

Overall the U.S. trade deficit with all its trading partners was down slightly, to $711.6 billion in 2007, from $758.5 billion in 2006. That owes to lowered consumer spending and a decline in the value of the dollar.

But China trade continues to zoom. The United States now imports more from China than from any other country. It’s not like Chinese brands are filling American shelves. For the most part, imports are a case of U.S. companies choosing China as the location to produce manufactured goods. Production that used to be outsourced to other less-developed countries is coming to be concentrated in China.

The imbalance is alarming to leaders of the American labor movement, which at one time was strongest in manufacturing.

“Our imbalance with China is unsustainable,” said AFL-CIO President John Sweeney in a press statement reacting to the release of the annual trade statistics. “Our government must take immediate and effective actions to ensure that the Chinese government plays by the rules – with respect to currency, illegal subsidies, tax policies and workers’ rights.”

The labor federation is backing a bill in Congress, the Currency Reform for Fair Trade Act (HR 2492), which declares currency manipulation an illegal trade subsidy and provides American manufacturers the opportunity to seek relief against countries that don’t freely exchange their currency, including China.