The Bureau of Economic Analysis (BEA) released February trade results this morning (link to the full report provided above). This is the first month of trade data since President Obama announced in January his plan to double exports in five years. Being skeptical, I promised that I would track his progress against this pledge. It’s a fine pledge, but wasn’t backed up by any trade policy action.
Well, we’re off to an extremely weak start. In order to double exports in five years, they need to rise at a rate of 1.16% per month, which would be an increase of $1.66 billion over January’s exports. However, exports in February rose by only $0.3 billion.
And, of course, the real goal is to slowly reduce the trade deficit, reaching a balance of trade in five years. By that measure, the news is even worse. Imports jumped by $3.1 billion, increasing the trade deficit by $2.7 billion.
Here’s the chart that tracks progress toward Obama’s pledge:
It’s a little difficult to see just one month of data on the above chart, so here’s a chart of only the first year of this five-year “plan”:
It’s not my intention to bash Obama here, but to point out the folly of expecting improved trade results when no action has been taken toward that end. No doubt, the president believes that he has taken action by playing the diplomat and securing from other nations pledges to boost their imports of American goods. But this is nothing more than the same approach of every Democratic and Republican president who has preceded him for the past three decades. Albert Einstein famously defined insanity as doing the same thing over and over again and expecting different results, which is exactly what Obama’s trade policy is doing.
No improvement in the U.S. balance of trade is possible until tariffs are implemented to counteract the role of population density disparities in driving trade imbalances. February’s trade results are just one more pebble added to the ever-growing mountain of evidence.