Enormous, Humongous June Trade Deficit Hits Jobs, Growth

Dave Johnson

The U.S. Census Bureau reported Wednesday that the June goods and services trade deficit was an enormous, humongous $43.8 billion. This is an increase from May’s enormous, humongous $40.9 billion trade deficit.

The monthly U.S. goods deficit with China fell a bit in June to an enormous, humongous $29 billion from an enormouser, humongouser $30.6 billion.

The U.S. goods deficit with Japan was $5.2 billion in June.

The U.S. goods deficit with South Korea was $2.3 billion in June.

Our strong dollar policy is part of the problem. A high value to the U.S. dollar means that goods made here cost more than goods made in countries with “weak” currencies, so the orders go there, not here. A strong dollar is good for people and businesses who are sitting on a lot of money, because they can buy more stuff (and companies). A strong dollar obviously is terrible for companies who want to sell things made inside the U.S. to the rest of the world – and those employed by exporters (or not employed because exporters are hurt by the strong dollar).

Bloomberg Business, in “Trade Deficit Widens, Showing Effect of Strong U.S. Dollar,” explained that “the trade deficit in the U.S. widened in June as the strong dollar lifted imports and hobbled exports, representing a hurdle for economic growth.” The report explains that this cuts growth (and therefore jobs):

“Exports are still hurting from the combination of soft global growth and the stronger U.S. dollar,” said Richard Moody, chief economist at Regions Financial Corp. in Birmingham, Alabama, who correctly projected the shortfall. “Trade is going to continue to weigh on growth.”

The trade deficit literally drains our economy. Our “deindustrialization” trade policies have caused us to have continual trade deficits every single year since the late 1970s, when the “free market” “free trade” ideology rose up and bit us.

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