The above-linked report, released by the Bureau of Economic Analysis (BEA) this morning, reports that the trade deficit soared in January to $56.6 billion, the worst reading since October 2008. Here’s a chart of the data, dating back to January of 2010 when President Obama boasted that the U.S. would double its exports within five years: Balance of Trade.
Exports of manufactured goods fell in January and remain at the same level as March of 2012. During that time, imports of manufactured goods have risen by $36 billion. The goods deficit rose to $76.4 billion in January, an annual rate of $917 billion. The deficit in manufactured goods alone was $68.3 billion, and is rapidly getting worse. Check this chart: Manf’d Goods Balance of Trade. Since Trump took office, the trade deficit has jumped by 16%.
The trade deficit is killing economic growth. It cut 4th quarter GDP (gross domestic product) growth by 31%. Without the effects of trade, 4th quarter GDP would have come in at 3.63% instead of the actual figure of 2.5%. GDP hasn’t grown by 3% since 2005.
This isn’t what Trump promised us. While tariffs on steel and aluminum would be a good start, what’s needed badly are tariffs that cover the entire spectrum of manufactured products until a balance of trade is restored. Perhaps with the departure of globalist Gary Cohn from Trump’s economic team, some real progress on trade may finally be possible.