As announced by the Bureau of Economic Analysis (BEA) this morning (see above link), the U.S. October trade deficit moderated slightly to $40.6 billion from $43 billion in September. The overall trade deficit continued its moderating trend that began in February of last year, thanks primarily to an improving balance of trade in oil. During that time frame, oil imports have fallen by $7.0 billion while oil exports have risen by $3.2 billion – a swing of $10.2 billion in the balance of trade in oil. That’s great news. Here’s the chart for the overall balance of trade: Balance of Trade.
The bad news lies in the details. Our balance of trade in manufactured goods, though it improved by $1.6 billion in October, continues on an overall downward trend. Here’s the chart: Manf’d Goods Balance of Trade.
Exports of manufactured goods lagged the president’s goal of doubling them in five years for the 27th consecutive month and by a record margin – $33.9 billion. They haven’t risen at all in the past year. Overall exports lagged the president’s goal for the 25th consecutive month, and by nearly $49 billion. In other words, the U.S. would now be enjoying a surplus of trade if the the president had met his goal. But that was never possible since the U.S. has absolutely no control over exports. Here’s the chart: Manf’d exports vs. goal.
But the most disturbing news in the report is what’s happening to our balance of trade with Europe. In October, the trade deficit with the EU hit a new monthly record of $14.3 billion. And it’s on pace to shatter the annual record, set only last year, by 15%. This is led by a record deficit with Germany of $6.9 billion in October. Our trade deficit with Germany is on pace to shatter last year’s annual record by 22%. And we also had a record deficit with Ireland in October of $3.2 billion - also on pace to beat last year’s annual record.
President Obama’s approval rating has been sinking. Nowhere is his failure greater than his failure to follow through with his campaign promise to fix America’s broken trade policy.