This comes from the GMAT Prep test from MBA.com

In contrast to ongoing trade imbalances with China and Japan, the United States trade defecit with Mexico declined by $500 million as a result of record exports to the country.

A) same
b)In contrast to ongoing trade imbalances with China and Japan, the United States sold record exports to Mexico, reducing its trade deficit by $500 million.
c) When compared with ongoing trade imbalances with China and Japan, the United States sold record exports to Mexico,reducing their trade deficit by $500 million.
d)Compared with ongoing trade imbalances with China and Japan, the United States sold record exports to Mexico, reducing the trade deficit by $500 million.
e) Compared to ongoing trade imbalances with China and Japan, the United States record exports to Mexico caused a $500 million decline in the trade deficit with that country.

OE is A. I was able to eliminate B and C due to the use of the pronouns in the second part (referring to Mexico or US). Why is E incorrect, I feel like it clear. I thought that A was incorrect because of the use of "contrast to" When do we use Compare with vs. Compare to and Contrast with vs. Contrast to? are they interchangeable?

Option “E” is wrong because this option is comparing apples to oranges. For e.g. it is “ongoing trade imbalances with China and Japan” with “the United States record exports to Mexico”. Correct answer choice “A” has right comparision. You can use “In contrast to” do the comparision.

rschunti is on the mark.

to be specific, choice e compares 'trade imbalances' to 'the U.S.', which is about as invalid as comparisons get.

for that matter, the other wrong answers (b, c, d,) ALL make the same invalid comparison as well. only choice a properly compares the ongoing trade imbalances to the u.s. trade deficit.

Ron sir
I think E compares 'trade imbalances' to 'the U.S. record exports' so comparision should be valid

I believe you have it right when you say -

BUT How can 'trade imbalances' be compared to US record exports? It makes grammatically correct structure. But logically 'trade imbalances' can be compared with 'trade deficit' but not with exports.

E does not have possesive form of US so E is comparing "trade imbalances with the US.
For the meanin gyou wrote above E would need united states'

Pathik

indeed.

and even in the (somewhat likely) event that the original poster simply forgot an apostrophe, the comparison is still logically invalid, for reasons stated above by Captain.