The Bureau of Economic Analysis announced on Thursday that the U.S. trade deficit soared to $53.1 billion in June – the highest level since Obama took office – from $50.8 billion in May (the previous worst level of the Obama administration).
In January of 2010, the Obama economic team asked, “Why can’t we be a net exporter like Germany?” President Obama then set a goal of doubling exports within five years. Since then, instead of making progress toward being a net exporter, our status as a net importer has dramatically worsened. Since January, 2010, our trade deficit has exploded by 42%. Here’s the chart:
Some might lay the blame on the rise in oil prices, and suggest that manufacturing is actually doing better. Not so fast. Yes, oil prices have risen, resulting in a 35% increase in our petroleum products trade deficit. But the deficit in manufactured products has risen even faster – 42% (just like the overall trade deficit). Exports of manufactured products fell short of Obama’s goal in June and worse yet, imports have risen even faster. Here’s a chart of trade in manufactured goods:
And here’s a chart of how overall trade is doing vs. Obama’s goal of doubling exports:
Yes, we’re pretty much on track, but the faster growth in imports has blunted the effect of exports. Instead of creating jobs, the president’s failure to address the import side of the trade equation has instead outsourced hundreds of thousands, perhaps millions, of high-paying manufacturing jobs. His strategy, the same strategy employed by his predecessors for decades, has been an abysmal failure. And now, instead of following through with his campaign promise to fix broken trade agreements – especially NAFTA, he advocates more such “free” trade agreements, especially the agreement he negotiated with South Korea which caps U.S. auto exports at 75,000 per year while leaving South Korean imports unlimited, as a way to create more jobs. Unbelievable.
As the trade deficit has worsened, so too has the economy, with GDP now completely stalled and manufacturing in decline, as evidenced by three consecutive months of declines in the Empire State manufacturing survey, with the decline in August being by far the worst. And there’s no hope that anything will change. Obama simply doesn’t have the intestinal fortitude to stand up to export-dependent overpopulated nations and take positive action to restore a balance of trade. His weak negotiating skills, first exposed early in his term when he was sent home from Mexico trade talks with his tail between his legs, were on display again during the deficit reduction negotiations with Republicans. He caves in every time.
Based on his promise to fix our trade mess, I voted for Obama. I was suckered. This president is another Jimmy Carter and he’s got to go. I don’t know that we can expect any better from any of the Republican hopefuls but, while holding my nose, I’d rather trade a proven failure for one of these unknown entities. It can’t get any worse.