Every Aspect of Trade Deficit Worsens Since Obama’s Pledge to Double Exports

http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

The U.S. Bureau of Economic Analysis (BEA) released trade figures for the month of August this morning.  It was little changed from July’s awful reading of $45.6 billion. 

If you’ve been following my blog, you know that I’ve been tracking how the U.S. has been doing in exports since President Obama’s pledge in January, 2010 to double exports within five years.  I’ll get to that in a moment.  Of greater importance is how the U.S. is doing in terms of its balance of trade, both overall and, more importantly, in manufactured products.  Only by eliminating our trade deficit in manufactured products is there any hope of bringing millions of manufacturing jobs back home.

I was particularly struck by the following data this morning.  Since making his pledge in January, 2010:

  • our overall trade deficit has worsened by 21.7%  Here’s the chart:  Balance of Trade
  • our trade deficit in manufactured products has worsened by the exact same figure – 21.7%
  • our trade deficit in petroleum products has worsened by 19%.
  • our trade surplus in food products has shrunk by 17%.

Our trade picture has darkened dramatically since Obama made that pledge.  With that said, let’s now take a look at how we’re doing with exports.  Here’s a chart of overall exports and imports since January, 2010:

Obamas Goal to Double Exports

Is it just me, or does anyone else find it suspicious, even downright implausible,  that exports have tracked so closely to Obama’s goal to double exports?  Is it possible that some category of exports is being manipulated?  Here’s a stunning piece of data that I didn’t realize until I examined the data more closely this month:  while our trade deficit in pretroleum products has worsened by 19% since January 2010, driven largely by a 37% increase in oil imports (most of which is due to the rising price and not an increase in demand), oil exports have risen by 226%!  Oil exports!  From a nation desperate to reduce its dependency on foreign oil! 

In the meantime, exports of manufactured goods have fallen short of Obama’s goal by $5.1 billion per month.  Here’s the chart:

Manf’d Goods Balance

Hmmm.  Exports of manufactured goods are lagging Obama’s goal by about $5.1 billion at this point, only 1-2/3 years into his 5-year goal.  At the same time, oil exports have risen by $5.7 billion (an increase of 126%).  The end result is that overall exports fall exactly on Obama’s target line.  Pure coincidence?  Maybe.  But it sure looks suspicious.

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7 Responses to Every Aspect of Trade Deficit Worsens Since Obama’s Pledge to Double Exports

  1. Rob222 says:

    Pete,

    Karl Denninger has had a couple of post lately on trade, specifically Smoot-Hawley and of course the lastest “Free Trade” agreements. Check them out if you get the chance:

    http://market-ticker.org/akcs-www?post=195769

    http://market-ticker.org/akcs-www?post=195906

    I don’t think Karl has heard of your theory, but from the gist of his writings I think he be open to it as he can do the math.

  2. Mark Hall says:

    Pete,

    Enough of this Doom & Gloom!

    Our U.S. Trade Policy actually set (3) new records in August and is on track to set (2) additional records yet this year.

    NEW RECORDS SET IN AUGUST:

    1. Our imports from China totaled $37,363.8 million.

    (The largest amount that we have ever imported from (1) country)

    2. Our imports from Vietnam totaled $1,775.8 million.

    (The largest amount that we have ever imported from Vietnam)

    3. Our trade deficit with Vietnam totaled $1,451.4 million.

    (The largest monthly trade deficit that we have ever had with Vietnam)

    ADDITIONAL RECORDS TO BE SET:

    1. We are now on track to record our largest ever annual trade
    deficit with India.

    2. We are now on track to record our largest ever annual trade
    deficit with Vietnam.

    AMERICAN PROGRESS!!!!!!!

    • Pete Murphy says:

      Good eye, Mark! I also noticed the big jump in the deficit with China and meant to check it out to see if it was a record. And, in fact, it is, just as you reported. The trade deficit with China in August – $28.96 billion – surpasses the previous record of $28.16 billion, set exactly one year earlier in August, 2010. This, in spite of the fact that the yuan has appreciated by 23% since 2005.

      And thanks for the info on Vietnam and India. For the benefit of other readers, those two nations are 8 times and 10 times more densely populated than the U.S., respectively. It’s the disparity in population density that drives trade imbalances, not currency valuations or low wages.

  3. ClydeB says:

    We should be so proud of these new and pending new records. How can we celebrate, Mark?

    What must we do to get politicians to recognize the hazard of the trade deficit? Although it was encouraging to read some of the recent comments regarding China’s currency evaluation flap. Some at least did recognize that there is a trade deficit, although they atribute it to currency manipulation. Implying that if the currencies were equitably valued all would be hunky dory.

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