On the surface, Friday’s release of the trade deficit figure for the month of October looks like the “same ol’ same ol’.” The trade deficit came in at $43.9 billion – about the same level it’s hovered at for years. You might conclude that our trade situation is stable. You’d be wrong. Thanks to falling oil prices and growth in domestic oil production, a steady decline in our deficit in oil has masked an alarming worsening of our balance of trade in manufactured goods.
Look at this chart: Manf’d Goods Balance of Trade. In the past five years, while our overall trade deficit has held steady, the trade deficit in manufactured goods has very nearly doubled. And, as you can see, beginning in 2013 the decline has accelerated. In the last year, manufactured exports have declined by 8%. Imports have risen only 1%.
Remember President Obama’s pledge in January, 2010 to double exports within five years? Take a look at this chart to see just how abysmal his failure to keep that promise has been: Manf’d exports vs. goal. Manufactured exports in October were exactly the same as they were in July of 2011. That’s 4-1/4 years of absolutely zero growth in exports.
Other measures of U.S. manufacturing have shown that sector of the economy to be declining at a double-digit pace. U.S. manufacturing isn’t just in a recession. It’s in a full-blown depression. Only auto sales are keeping it alive at all, and there’s a lot of concern that that’s been propped up with ridiculous, sub-prime lending terms – the kinds of loans that produced a housing market collapse in 2008 that nearly took down the whole economy. But auto loans never got the same scrutiny.
Last week, GM announced that it will soon begin importing some Buick SUV’s from China. It’ll be the first imports of Chinese autos and will likely open a flood gate that could devastate American auto manufacturing, an event that would likely lead to total collapse of the manufacturing sector of the economy.
All Americans should be alarmed by what’s happening here – by the damage being done by idiotic trade policy that fails to recognize the harm being done to our economy by overpopulated nations who come to the trading table with nothing to offer but a bloated and hungry labor force, like a plague of locusts descending on a field of crops.