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

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

I chose "C", so what is the reason this answer is wrong.
In "A" what is compared with what? Does the comparision Is between "On going trade imbalance with China and Japan" and "The United states"? or comparision is between "On going trade imbalance with China and Japan" and "United state trade deficit"? Pls explain as to what is compared with what and some rules need to apply when encountering this type of situation? Also wil it be possible to explain why other answers are wrong?

C is wrong because of the use of 'their' at the end of the sentence. C makes it sound like the United States sold record exports to Mexico, reducing Mexico's trade deficit by $500 million, which is absurd.

Further, I think that trade imbalance are being compared (that of China & Japan with that of the US). This comparison is drawn logically only in choice A by placing 'the United States trade deficit' right after the comma. Every other choice is comparing 'trade imbalance' with 'the US'.

In situations like these when no answer seems right gramatically, I use POE
B - comparing trade imbalances with record exports, thats not right
C - we do not want to compare trade imbalances with US
D - same as C
E - same as C

A remains.

Hi Dingo, you said that comparision as given in "B, C, D and E" are wrong. So why it is ok to compare trade imbalances with trade deficit? Are we comparing apples to Apples in "A' and why?

rschunti,

One of the primary difficulties with GMAT verbal is that, unlike with GMAT math, there is no "correct answer." Instead, there is only a "best" answer. In this particular problem, I agree that the term deficit could have been compared to another deficit, but this option was not provided. Since a deficit is a trade imbalance, however, answer choice A contains an arguably logical comparison; each of the other answer choices contains a provably illogical comparison. Thus, A is the best answer choice available.

Hope that helps!
-dan

Thanks Dan. One more question.Am I correct in assuming following error in C,D and E?
In correct usage of modification using participle phrase“reducing the trade deficit by $500 million”. We are not sure whether this participle reducing is modifying Mexico’s trade deficit or Unites state’s.

nope.

'reducing' is a-ok in all three of those choices. in fact, participial modifiers have a great deal more freedom in their placement than do other types of modifiers.
* in choice c, 'their' is wrong (the united states must be singular - yes, i know this is confusing, because 'states' would be plural) and, in addition, this sentence literally says that the u.s. sold record exports to mexico while it was being compared with... (i.e., all the sales happened while some random analyst was making a comparison).
* choices d and e both fallaciously say that the u.s. is being compared directly to trade imbalances. that doesn't make a lot of sense.