I usually call the main features of the monthly trade figures issued by the U.S. government “highlights,” but if you read on, you’ll see why the historically bad April numbers released this morning make that a whopping misnomer.
The big news: The worst monthly deficit in America’s non-oil goods trade since February, 2007! Since this portion of our trade is the part most strongly influenced by U.S. trade deals and other U.S. trade policy initiatives, and since increases in the trade deficit slow down growth (and therefore hiring), it’s easy to see why this statistic should be read as a big flashing red light for President Obama’s trade policy agenda. After all, the ambitious agreements he’s seeking with the European Union and a group of Pacific Rim countries are modeled after the deals Washington has been signing since U.S. leaders produced the North American Free Trade Agreement (NAFTA) in the early 1990s. Why would anyone think that a Congressional grant of fast track negotiating authority for the President would bring better results?
In any event, here’s what the Census Bureau told us this morning about the nation’s trade accounts:
> The monthly U.S. goods and services deficit rose by 6.93 percent in April, and hit its highest levels since April, 2012.
>This combined April deficit hit $47.24 billion – up from March’s upwardly revised $44.18 billion. Partly because of newly published trade figures revisions going back to 1999, the March revision of 9.41 percent was unusually large (from $40.38 billion). As a result, the April trade deficit was fully 16.98 percent worse than the previously reported March figure.
>The non-oil goods portion of the April deficit hit $46.76 billion – up 10.72 percent from March’s $42.23 billion and the largest monthly total since the $47.55 billion level recorded more than seven years ago.
>Also casting major doubt on the Obama trade agenda were the dreadful April trade figures for Korea – with which the President has signed a trade deal touted by his administration as the model for his sweeping proposed Trans-Pacific Partnership.
>The April U.S. merchandise deficit with Korea skyrocketed 81.77 percent on month, from $1.26 billion to $2.28 billion. U.S. goods exports to Korea fell 11.48 percent, from $4.63 billion to $3.86 billion. U.S. merchandise imports from Korea increased by 9.38 percent, from $5.62 billion to $6.15 billion.
>Since the President’s trade agreement with Korea went into effect in March, 2012, America’s trade performance has been even worse. On a monthly basis, the merchandise deficit has more than quadrupled, from $551 million. U.S. exports are down 8.59 percent, from $4.23 billion, and U.S. imports have soared by 34.28 percent, from $4.78 billion.
>Also still damaging the U.S. economy are still-huge and rising merchandise trade deficits with China, whose renewed manipulation of the yuan continues to be enabled by the President’s inaction.
>The China merchandise deficit rose by 33.72 percent in April, from $20.40 billion to $27.28 billion. U.S. goods exports to China’s still growing economy sank by 16.67 percent, and the much larger amount of Chinese exports to the much slower growing United States was up by a nearly as fast 16.25 percent.
>Consequently, the U.S. merchandise deficit with China this year is running 3.24 percent ahead of last year’s record level.
>Also heading for a new record is the immense, longstanding U.S. trade deficit in manufacturing. The April manufacturing deficit of $63.19 billion was 22.18 percent greater than March’s $51.72 billion, the third highest on record, and the worst since October, 2012.
>U.S. manufacturing exports dropped by 5.06 percent in April, from $104.16 billion to $98.89 billion. Imports, however, increased by 3.97 percent, from $155.88 billion to $162.08 billion.
>As a result, despite claims by President Obama and so many others of a domestic manufacturing renaissance, the U.S. manufacturing deficit this year so far is running 8.57 percent ahead of last year’s record pace.
>Another lowlight of the April trade report was the more than doubling of the volatile U.S. deficit in high technology goods – from $3.88 billion to $8.37 billion. This level is the highest since November, and could bring to a halt the improvement in this key trade balance since 2012. April U.S. high tech exports fell by 7.92 percent from March levels, while imports increased by 6.53 percent.