The U.S. Census Bureau reported Wednesday that the March goods and services trade deficit fell to “only” an enormous, humongous level of $40.4 billion in March. This is $6.5 billion less than February (revised) but not for good reasons (see below). Chinese imports were 44.4 percent of the overall U.S. goods deficit and were down $6.2 billion to $26 billion. The real goods deficit decreased $5.8 billion to $57.4 billion in March.
From the report: “March exports were $176.6 billion, $1.5 billion less than February exports. March imports were $217.1 billion, $8.1 billion less than February imports.”
MarketWatch reports that the deficit drop isn’t for good reasons, with consumers wary of spending after recent news of big stock market drops.
U.S. exports fell 0.9 percent to $176.6 billion in March and remained near the lowest level in several years, the government reported Wednesday. Exports of food and industrial supplies dropped to the lowest level since 2010.
Imports fell an even steeper 3.6 percent to $217.1 billion and touched a five-year low. Although cheaper oil contributed to the drop, the U.S. also imported fewer autos, clothes, computers, consumer goods, wine and beer.
Huge, Ongoing Trade Deficits
This week’s post, “Indiana’s Carrier Factory Cuts Focused The “Trade” Election Issue,” explained how “trade” is used to intentionally drive down U.S. wages and enrich Wall Street shareholders,
Moving jobs to Mexico and other low-wage countries impoverishes American workers and devastates entire regions of the country, while enriching executives and Wall Street shareholders. Our country used to “protect” our democracy with its good wages and environmental protections by assessing a tariff on goods coming from countries that exploit workers and the environment. This prevented the cost savings gained from this kind of exploitation from undermining American workers and their quality of life.
Since “free trade” ideology took hold in the 1970s, undoing these protections and allowing companies to move production out of the country, our country has had a trade deficit every single year, and American workers have not seen a wage increase. Wall Street’s share of the economy (and political power) has soared while manufacturing’s (and workers’) share has declined. Inequality has accelerated.
Today’s report shows that our country’s leadership is willing to accept a trade deficit of $40.4 billion a month – and real goods deficit of $57.4 billion. This trade deficit is a metric for jobs, factories and wealth being drained from our country – so that Wall Street shareholders can pocket the short-term gains from paying lower wages, never mind the long-term damage to the country as a whole.
Trump’s Trade Message: He Will Stop The Carnage From These Trade Deals
This trade deficit, and the terrible results that are just devastating communities and entire regions of the country, provide powerful election ammunition to Donald Trump. When a factory is closed and a job is moved out of the country so that executives and Wall Street shareholders can pocket the wage differential, it does not affect only the workers who are laid off. The suppliers are affected. The nearby businesses are affected. The country’s manufacturing ecosystem is affected. And the unemployed workers are competing for the remaining jobs, which drives down everyone else’s wags as well.
This is what Wall Street wants because it means big gains for them. And this is what our country’s leaders go along with. But it is also driving the Trump phenomenon.
In his “victory speech” following the Indiana primary Donald Trump said (emphasis added):
“We have to win again … we lost with trade … we have to start winning again […] She [Clinton] doesn’t understand trade. Her husband signed perhaps in the history of the world the single worst trade deal ever done. It’s called NAFTA. And I was witness to the carnage, over the last six weeks especially. … I’ve witnessed what it’s done really first hand and we’re going to change it around. We’re not going to let Carrier and all of these companies just think that they can move, go to another country, make their product, sell it back to us and we get only one thing, unemployment. Not going to happen anymore folks. We’re going to bring back our jobs and we’re going to keep our jobs. We’re not going to let companies leave … And if they want to do it anyway there are going to be consequences.”
People use “NAFTA” as a shorthand term that really means all of our country’s trade policies since Wall Street sold “free trade” ideology to our country’s elites in the 1970s and we started moving large numbers of jobs out of the country. Trump knows that and uses it skillfully.
The trade deficit is real. It is enormous and humongous. It has been in deficit every single year since the 1970s. It has been and is doing real harm to our economy, wages, ability to make a living and to democracy itself. Pay attention.