As announced by the Bureau of Economic Analysis this morning (link to the report provided above), the U.S. trade deficit rose slighly in December to $38.7 billion – a fairly benign figure that continues a declining trend. But slight improvements in the balance of trade for services, food and petroleum products mask a big $4.9 billion drop in manufactured exports that resulted in a record deficit in manufactured goods of $46.5billion.
Manufactured exports fell to $106.5 billion, the lowest level in 27 months. To keep pace with with Obama’s goal to double exports within five years (a goal he set in January, 2010), exports needed to rise by $39.5 billion per month. Manufactured exports now lag the president’s goal by a record $41.3 billion.
Imports of manufactured goods in December were $153 billion, only $0.4 billion shy of the record set only 3 months earlier. Clearly, if the president’s goal is to generate manufacturing jobs by reducing the trade deficit, his focus is misplaced. He has no ability to influence exports which are determined solely by foreign demand. But he has total control over imports, control that a change in trade policy toward a greater use of tariffs would give him. But he lacks the fortitude for that approach.
Here’s a chart of manufactured exports and imports: Manf’d exports vs. goal
And here’s a chart of the manufactured goods trade deficit: Manf’d Goods Balance of Trade
This kind of debunks the whole notion of the mythical “manuacturing renaissance,” doesn’t it?