The Bureau of Economic Analysis reported this morning that the trade deficit widened in July to $39.2 billion, thanks to a $3.5 billion jump in imports and a $1.1 billion decline in exports. Here’s a chart of our overall balance of trade: Balance of Trade.
While our overall balance of trade has been improving, thanks to falling oil imports and rising oil and gas exports, it’s an entirely different story for the category of manufactured goods. The decline in exports was led by a $3.6 billion drop in manufactured exports. Manufactured exports have been flat since March, 2012 and now lag the president’s goal of doubling them by $29.9 billion – a new record. (In January of 2010, the president set a goal of doubling exports within the next five years.) In July, the trade deficit in manufactured goods was $40.7 billion – exceeding the total trade deficit. Here are charts of the balance of trade in manufactured goods and a chart of exports (and imports) vs. the president’s goal of doubling exports: Manf’d Goods Balance of Trade, Manf’d exports vs. goal.
Overall exports now lag the president’s goal by $43.8 billion per month (over a half-trillion dollars per year) – also a record amount.
The trade deficit with China soared to $30.1 billion in July – a new record. And our trade deficit with S. Korea for 2013, through July, is now running 44.4% ahead of 2012. Remember when, upon signing his trade deal with S. Korea in early 2012, President Obama hailed it as a “big win for America’s workers?” Instead, as is always the case with free trade deals with badly overpopulated nations, it’s killing American manufacturing jobs by the droves.
I’ve said it every month and I’ll say it again – none of this comes as any surprise. The president’s focus on increasing exports to restore a balance of trade is misplaced because the U.S. has absolutely no control over exports, which are determined solely by foreign demand. We do have complete control over imports, but the president lacks the courage to use those controls, contrary to his election promise to do so. His goal of turning the U.S. into a Germany-like, export-driven economy was doomed from the outset because there is no other United States out there to sop up our exports as we do for Germany.