The US trade deficit is huge while countries such as Germany and Japan have big surpluses. In 1970 the US had a trade surplus of $ 2.2 billion, what has gone wrong?
The american trade deficit in goods and services soared to an all-time high of $716.7 billion in 2005, pushed upward by record imports of oil, food, cars and other consumer goods. In 2005 the gap between what America sold abroad and what it imported rose 17.5% from the previous record of $617.6 billion set in 2004. But there is more pain. The trade deficit was $378.2 billion in 2000 and just $96.3 billion in 1995.
As you see, the trade balance has worsened. It has no precedents in world history. And it has been growing exponentially. This deficit could surpass $1 trillion in a few years. It will have dramatic consequences.
Many companies and workers have been affected by this. Countries with cheaper labor costs will leave many americans unemployed. The manufacturing jobs that are exported to poor countries are replaced by jobs in the services sector that pay less. The fact is that fast-food restaurants do not pay as much as the car industry. Since mid-2000 the US has lost nearly 3 million manufacturing jobs. I can not deny that those losses are in great part because of a higher productivity but also because of the growing deficit.
Today, United States has slightly more than 14 million workers in the manufacturing sector. Japan has more than 11 million workers in the same sector. This is about 80% of the number of workers that U.S. has in the manufacturing but Japan has just 43% of the population of United States. This means that the percentage of japaneses in the manufacturing is of far higher than in U.S. Many rich countries have a higher percentage of workers in the manufacturing than United States.
Remember the 80s? There were many articles about the growing Japanese exports to America. That Asian country had a big surplus. The American deficit with Japan was around $50 billion and it became a headache. The politicians and businessmen complained about it. However even those years were great compared with the present time. The US trade deficit with China has grown exponentially. It was just $6 million in 1985. It increased to $10.4 billion in 1990. It grew to $201.6 billion in 2005. It could be 10% higher in 2006.
The American trade deficit with Canada jumped from $5.9 billion in 1991 to $78.4 billion in 2005. In 1991 U.S. had a deficit of $4.8 billion with Germany. It grew to $50.5 billion in 2005.
The trade deficit was $58.9 billion in October. The U.S. trade deficit with China widened to a record $24.4 billion in October from $20.4 billion in the same month last year and $22.3 billion in September. The trade gap with China rose to $190.6 billion in the first ten months of the year, up from $166.8 billion in the same period last year.
We oppose the policies of manipulating the currencies to take advantage of the United States or the lack of reciprocity in trade ties. The currencies must not be undervalued, so, the goods and services produced by a nation will have their real costs. This way countries will not be able to flood the american market with cheap imports and at the same time those countries will have more purchasing power to buy American goods, this way the deficit will be corrected.
[Edited by Simon – Typos, grammer, and removed the spam advertising]
1 user commented in " Rescue the U.S. Economy, Export More!! "
Follow-up comment rss or Leave a TrackbackExport more. Now that’s a thought.
What shall we export. Clothing, no garment industry has been all but shut down due to outsourcing.
Manufactured goods? Do we make anything here anymore? Tools? Washers/dryers? Most appliances are made overseas. Televisions? No. I had to drive 10 miles to buy two crescent wrenches which were made in the U.S. myself. Gladly paid the $32.00.
Until we STOP buying imported goods. Our country will continue to decline. When certain countries couldn’t beat us with cold war tactics, they beat us with our consumer driven goal of lower priced goods and higher bottom line profits for companies.
That’s all well and good if you own lots of stock in companies, cause you’re still making money. What do you care if 2,000 people in the next county over lost their jobs? You’re still making money. Life is good.
EXCEPT….
When you’ve destroyed our countries manufacturing base, for quick stock profits, eventually you get to the tipping point. People who have no jobs can no longer buy goods. It doesn’t matter how low cost they are.
Those politicians, that told us the global economy was good for us, most were stockholders in those companies. Wealthy guys, still making money. Not average Joes, out of a paycheck. The global economy is like exported slavery. Pay someone l7 cents a day over there or $10 an hour here. Hmmmm, quite a quandry for a business man.
Oh, wait…your answer was to export.
What can we make here, paying semi-living wages to most, that those folks making l7 cents an hour will be able to afford? Not much. Except humanitarian aid on which we make well, nothing. Of course, humanitarian aid does make us friendly to them, so when we come there offering the sky-high wages of l8 cents an hour (anyone from 6 yrs. old to 78 yrs. can apply – no age descrimination from our corporations). Get busy working over there, we’ve got a deficit to fix…we’ll be sending some stuff for you to buy soon. Save your pennies cause we’re counting on you.
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