Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Exports down. Imports down. Growth estimates down.
The trade data for February that were released on April 12 by the BEA show a fall in both U.S. exports and imports. The fall in imports suggests that U.S. demand is faltering, while the fall in exports suggests that world demand for U.S. products is stagnant. As a result, several groups have revised downward their estimates of first quarter U.S. growth to a paltry 1.5%.
Although most articles reporting the new trade data herald the tiny improvement between January and February, the annual trend is actually quite negative. In February 2010, the seasonally adjusted U.S. monthly trade deficit was $39.7 billion, while in February 2011 it had risen to $45.8 billion, as shown in the graph below:
Meanwhile, the U.S. trade deficit with China also continues to run above last year's levels, as shown by the blue line being above the red line every month for the past twelve months in the not seasonally adjusted graph below:
As China is proving, the U.S. lets its trading partners steal its industries by manipulating currency values while putting up barriers to U.S. products. This forces American companies to locate their factories (followed by their R&D) in the mercantilist countries in order to sell to the growing markets of the mercantilist countries and causes U.S. markets to stagnate. The U.S. economy will likely stagnate until the U.S. finally enacts a WTO-legal scaled tariff to balance trade.
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