The Census Bureau reports the U.S. deficit on trade with other countries rose in January to $48.5 billion, the highest level in five years. It is up 9.6 percent from December’s $44.3 billion, and 11.8 percent from January of 2016.
January exports rose $1.1 billion to $192.1 billion, while imports grew $5.3 billion to $240.6 billion. The U.S. deficit on trade of goods with China remained at $30.2 billion.
A trade deficit exports our economy’s “demand.” It represents how many people and businesses wanting goods and services in this country turn to non-U.S. sources. This means U.S. factories and businesses lose out, and U.S. workers are not hired or are laid off.
$48.5 billion is a lot of demand loss to hit factories, businesses, paychecks, taxes and general economic well-being in a single month.
Pro free-trade ‘experts’ often say a key benefit of the practice is that exports increase, which ‘creates jobs.’ What they don’t say is that imports also increase, which destroys jobs and wealth.
Trade theory says any money ‘saved’ by finding lower labor and environmental costs overseas will bring benefits at home when it is invested in the U.S. economy. In theory, this should increase productivity, which in turn should benefit everyone. But in practice, it doesn’t. Executives and investors can just pocket the difference, and trade agreements often enable this. It’s about making the rich richer.
Of course, Donald Trump understood how hard free-trade policies are hitting U.S. jobs and the economy at large, and took advantage of the dissatisfaction that creates to help get elected.
Unfortunately, so far he is only offering policies that boost the wealthy at the expense of the rest of us, especially the very workers he appealed to during the election.
Will he break away from Twitter long enough to offer pro-worker policies that bring back good jobs with good paychecks to our shores? Fat chance. We’ll see.