The U.S. Department of Commerce released the July U.S. trade figures this morning. We reached a new job-sucking record with China. If you are a Wall Street or Chinese billionaire it’s an occasion to break out the champagne.
However, if you are not a Wall Street or Chinese billionaire this is an occasion to get in line to beg for a job serving champagne. Because trade deficits like this means that at some point that is just about the only job that will be left in our economy.
The overall U.S. international goods and services trade deficit declined slightly from (revised) $40.8 billion in June to $40.5 billion in July. So the trade deficit “only” sucked $40.5 billion of jobs, factories and wealth out this month.
However the monthly U.S. goods deficit with China reached a record level $30.9 billion, up from $30.1 billion in June.
Exports climbed 0.9 percent to a record $198 billion. Imports also rose, climbing 0.7 percent to $238.6 billion, as shipments of food, beverages and autos from abroad increased.
Imports of oil products increased, but rising domestic production reduced the trade deficit in petroleum to its lowest in more than five years.
The overall trade deficit is down just a bit. Exports are up a bit. The trouble is that we still import so much more than we export. That means a net loss of jobs and decline in living standards, month after month, year after year. Elizabeth Brotherton-Bunch of the Alliance for American Manufacturing (AAM) writes about this in, “More Exports Are Nice, but Let’s Not Forget about Surging Imports“:
We’re still importing way more than we are exporting — and we’re not exporting enough of the high value goods that will support the strong manufacturing economic base we need to succeed. And as Richard McCormack notes in ReMaking America, the trade deficit costs U.S. manufacturing jobs:
[T]he increase of $169 billion in the U.S. trade deficit between 2009 and 2012 resulted in the loss of between 700,000 and 1.4 million U.S. manufacturing jobs — or more than 10 percent of total U.S. manufacturing employment. Typically, one manufacturing job generated four jobs in the service sector, so the increase in the U.S. trade deficit with China cost the United States upward of one million jobs in 2012.”
Exporting coffee mugs and necklaces abroad is great, but it isn’t enough. We need balance.
AAM President Scott Paul:
“The trade deficit is still a significant drag on economic growth and an impediment to a true resurgence in American manufacturing. Our trade deficit with China hit a new monthly record in July. That’s not progress. It’s time to aggressively enforce our trade laws, name China as a currency manipulator, and put in place a strategy to reduce the trade deficit.
“Manufacturing jobs are less than a third of the way back to recovering all of those lost during the Great Recession, and the trade deficit is a primary cause of this underperformance.”