The U.S. Census Bureau reported Friday that the January goods and services trade deficit was $41.8 billion in January, down $3.8 billion from $45.6 billion in December (which was revised down a billion). This is a drop of 8.3% from the prior month, which was a 2-year high.
Both imports and exports fell. Imports of goods and services fell 3.9% to $231.2 billion, partly due to reduced-priced oil imports. Exports fell 2.9% to $189.4 billion as the global economy cooled and the US dollar strengthened, making US goods more expensive internationally. West Coast port disputes played a role, disrupting supply chains.
The Wall Street Journal explained the drop in oil imports:
Last month, the trade deficit for petroleum products fell to $10.69 billion, its lowest level since November 2003. The average price of a barrel of imported crude oil was $58.96 in January, down from $73.64 in December and $90.21 a year earlier, the Commerce Department said.
The monthly goods trade deficit with Korea in January 2015 topped $3 billion. This was the largest monthly trade deficit with Korea on record. Our trade deficit with Korea has consistently been higher since the KORUS “free trade” agreement — the template for the Trans-Pacific Partnership (TPP) — went into effect.
Alan Grayson Explains Trade Deficit Harm
Trade is supposed to be balanced. That is where the word “trade” comes from. But since the neo-liberal “free trade” pro-corporate ideology took hold in the late 1970s the US has consistently run a trade deficit every single year, and it just gets worse. This literally drains our economy, jobs, wages, factories, entire industries and our ability to make a living as a country.
Trade is a simple concept. You sell me yours, and I’ll sell you mine.
That’s not what’s happening.
What’s happening is that day after day, month after month, and year after year, Americans are buying goods and services manufactured by foreigners, and those foreigners are not buying goods and services manufactured by Americans. We are creating millions — no — tens of millions of jobs in other countries with our purchasing power, and we are losing tens of millions of jobs in our country, because foreigners are not buying our goods and services.
What are they doing? They’re buying our assets.
So we lose twice. We lose the jobs, and we are driven deeper and deeper into national debt – and, ultimately, national bankruptcy. That is the end game.
This is not free trade; it’s fake trade. We have fake trade.
That’s why before NAFTA was enacted and went into effect, this country never had a trade deficit as much as $140 billion a year, while every single year since then — for 20 years now — we have had a trade deficit of over $140 billion a year.
We have had a[n average annual] trade deficit of half a billion dollars now, for the past 14 years.
Look back all across history. Look all across Planet Earth. You will see that the 14 largest trade deficits in the history of mankind are – all [of them] — the American trade deficits for the last 14 years.
(I cannot rule out the possibility that somewhere on Alpha Centauri there might be a country that has a larger trade deficit. But here on Planet Earth, no.)
Listen, we are in a deep, deep hole, thanks to fake trade. Thanks to fake trade, right now, 1/7th of all the assets in this country — every business, every plot of land, every car – 1/7th of all the assets in the country are now owned by foreigners. And ultimately, if we keep going the way we’re going, they all will be.
That’s why we have the most unequal distribution of income [among all industrial nations] in our country, [and] the most unequal distribution of wealth in our history.
We’re in a deep, deep hole. And there’s a simple rule about holes: When you’re in a hole, stop digging. Stop digging!
So I’m calling upon our leaders. I’m calling upon the American people. Let’s stop digging.
Let’s not only have a trade policy. For once, let’s also have a trade deficit policy.
Let’s deal with the reality that has robbed the American Middle Class now for decades. Let’s address it, and let’s defeat it. That’s what I’m calling [for], right now.
Let’s stop digging deeper. Let’s raise ourselves up, let’s climb out of this hole, and rebuild the American Middle Class. Thank you very much.