The Bureau of Economic Analysis (BEA) announced this morning that the February trade deficit fell $6.5 billion to $46.0 billion. Most of the decline – $4.0 billion – was due to fewer imports of manufactured goods. That’s the good news. But this decline is little more that a step forward in the one-step-forward-two-steps-back U.S. trade deficit that has been steadily worsening for years. Here’s the chart: Balance of Trade
The bad news is that exports rose by only $0.2 billion in February. In order to keep pace with President Obama’s goal of doubling exports in five years, they need to be rising by $2.2 billion a month at this point. As a result, exports lagged the president’s goal for the fifth month in a row, and now lag the goal by $10.4 billion per month – the largest shortfall yet. Here’s the chart: Obamas Goal to Double Exports
But, as I’ve stated before, the real goal is to double the exports of manufactured goods in five years, since that’s where the jobs are. And exports of manufactured goods have now lagged the president’s goal for ten consecutive months. Here’s the chart of the balance of trade in manufactured goods: Manf’d Goods Balance
President Obama’s strategy was to rev up manufacturing by turning our economy into an export-driven economy, like that of Germany. His strategy is fatally flawed in two critical ways:
- Germany has the U.S. to rely upon to absorb its exports. There is no other United States out there willing or capable of doing the same for us.
- The U.S. – like every other nation – has absolutely no control over exports. Exports are driven by outside demand. The best way to help manufacturing is by cutting imports, over which the U.S. has total control if only it chooses to exercise that control.
So 18 million unemployed Americans suffer on, thanks to a lack of leadership courageous enough to reclaim the right to manage trade in our own best self-interest.