Yesterday we learned that the trade deficit exploded in May, especially (as always) with China.
The other side of our increasing imports is our increasing exports. The dollar is down against some currencies, putting us in a stronger position. Some countries are doing better in this economy, also helping us export. As the world’s economy improves we find ourselves selling more to the rest of the world than we have in some time.
From the Export-Import Bank of the United States: U.S. Exports Top Nearly $175 Billion in May:
Exports of goods and services over the last twelve months totaled $1.958 trillion, putting U.S. exports 24.3% above the level of total exports in 2009. Over the last twelve months, exports have been growing at an annualized rate of 16.6% when compared to 2009, a pace greater than the 15% required to double exports by the end of 2014, which is the goal of President Obama’s National Export Initiative (NEI).
. . . “Increasing U.S. exports is a critical part of our economic recovery,” said Ex-Im Chairman & President Fred P. Hochberg. “We are on track to double U.S. exports by the end of 2014. Ex-Im Bank will continue to provide American companies, both large and small, with the competitive edge they need to expand their foreign sales.”
Good News Out Bad News In
So great news on exports. But the still-really-bad news on imports wipes out the good export news and the end result is a trade deficit that leaves us $50 billion in the hole. In just one month. (See if you can multiply $50 billion by 12… Hint: at this rate add another $600 billion to what we owe others.) Unfortunately this means a loss of jobs, not a gain of jobs.
As they say in England (where I am right now) what you gain on the swings you lose on the roundabout.
The Result Is What Counts
The net result is what counts. A trade surplus means we are gaining jobs, but a trade deficit is losing jobs. And sending even more dollars to others.
This is a lesson for the “free trade” deals being pushed. Yes, we will sell more to Panama, Columbia and South Korea. But will we sell more than we buy? If not, it is a net loss of jobs and that is what we need to be looking at.
We have to address the trade deficit, not just increase trade, in particular with China and with oil imports, if we want to create jobs here.