US Monthly Trade Deficit Widens by 18.9%
The BEA reports the Goods and Services Trade Deficit widened by 18.9% to $63.6 billion.
Details
- July exports were $168.1 billion, $12.6 billion more than June exports.
- July imports were $231.7 billion, $22.7 billion more than June imports.
- Year-to-date, the goods and services deficit increased $6.4 billion, or 1.8 percent, from the same period in 2019.
- Year-to-date exports decreased $257.8 billion or 17.5 percent. Imports decreased $251.3 billion or 13.8 percent.
Normally trade deficits shrink in recession. Instead they are getting worse.
Greatest Theft in History
Please consider US trade deficit with China wider than May 2016, when Donald Trump accused China of ‘greatest theft in history’
The deficit with China – the gap between the amount the US buys from China and what it sells – was US$31.62 billion in July, just 3.46 per cent lower than US$32.8 billion in July 2019, data released by the US Census Bureau on Thursday showed.
In quarterly terms, the deficit climbed 36.8 per cent from the first three months of the year to the second, even if it is markedly lower in year-to-date terms than it was last year, due to a shutdown of China’s export engine in the early months of the year, when it was the first to be hit by the coronavirus pandemic.
But perhaps most tellingly, the US trade deficit with China was 4.36 per cent wider last month than it was in July 2016, when Trump was on the campaign trail raging against it. Last month’s deficit was 9.15 per cent wider than May 2016, a month when Trump accused China of “raping” the US on trade.
“Do not forget. We’re like the piggy bank that is being robbed. We have the cards. We have a lot of power with China,” Trump said at the time, during a campaign rally in Fort Wayne, Indiana. “Because we cannot continue to allow China to rape our country. And that is what they’re doing. It’s the greatest theft in the history of the world.”
What About Soybeans?
Winning!
I am sick of winning. When does it stop?
Mish
St Louis Fed…In 2017, the top export category to China was civilian aircraft, at around $16.26 billion, followed by soybeans, at around $12.25 billion. The third-highest export was motor vehicles, at $10.3 billion, and fourth was electronic integrated circuits, at around $5.29 billion….
Aircraft, soybeans, motor vehicles, integrated circuits
China has been driving hard to become independent of outside sources (in particular, the US) in all of these area. Their first plane, sized to compete with 737’s will be available in 2021 (is Boeing even a desirable brand anymore?). Other soybean exporters with better currency alignment are replacing the US and China is increasing their internal production. Domestic models of cars within China are better suited to their road systems and the glamour of US models is fading in an era of nationalism. Integrated circuit production is a true national security and independence issue for China and increasing internal, independent production is the highest priority of the state right now.
Expectations that purchases would stay the same rate or increase are foolish, especially given the furious rhetoric on both sides. Time change, and we need to recognize we’re trying to “sell coal to Newcastle”.
By the way, the old rumor that China will dump treasuries has popped up again. In an official newspaper the following was provided….“China will gradually decrease its holdings of U.S. debt to about $800 billion under normal circumstances,” Xi Junyang, a professor at the Shanghai University of Finance and Economics, was quoted as saying on Thursday, without giving a detailed timeframe. “But of course, China might sell all of its U.S. bonds in an extreme case, like a military conflict.”
China, the second largest non-U.S. holder of Treasuries, held $1.074 trillion in June, down from $1.083 trillion the previous month, according to latest official data.
It was a given that when the government sent out stimulus checks and bonus unemployment, that it would be a huge stimulus….to the Chinese economy. It’s great to stimulate spending, but given that most things are made in China, you have to expect that the trade deficit would grow.
He turned around and stole oil from Venezuela (all Citgo revenue) and Syria.
A lot of our “stimulus money” is on its way to China. What consumers buy matters a great deal. When looking at the policies flowing out of Washington it is clear many politicians seem to have no idea that all consumer spending and purchases are not created equal. The fact is, consumers should take a long look at how their purchases will impact the economy over time.
Where money flows and who it enriches is a key component of economics, the failure to consider this is a blind spot many people have. The article below delves into this important issue.
“July imports were $231.7 billion, $22.7 billion more than June imports.”
…
Predictable.
Pay unemployed extra $600 / week to sit at home —–> stare at their TVs / computers —-> order boatloads of imported garbage from QVC / Amazon.
Trump just sees China as an effective bogeyman. It’s more about the demagoguery than anything else. He had one really big argument which was intellectual theft of capital and he muddied it with xenophobia
US trade deficit with China and world = ok
Trump use of trade policy for personal political gain = bad
More difficult question: Should the US care about China’s South China Sea aggression, aggression towards India, Hong Kong policy, human rights abuses, and theft of US IP? If so, should trade policy be used as a tool to address?
Note this is a broader question involving how morality should affect US foreign and trade policy – for example with Saudi Arabia?
These are the questions that should be the focus of public debate, and presidential candidate debate.
Indeed. Should America play for world policeman, prosecutor, judge, and hangman all rolled into one?
Does America have the record and moral stature to make this work?
Have we heard the voice of God telling us that it is the birthright of Americans to play the good guy in every situation, regardless of any details.?
“I am sick of winning. When does it stop?”
Agreed! Apparently undoing 30 years of selling out the working class can’t be reversed in 4 years.
Doubly so, when all you are doing, is accelerating the selling out.
There are other suppliers out there…
Brazilian soybean sales for marketing year 2019-20 (February 2020-January 2021) reached 95% of total estimated output of 124.5 million mt as of Aug. 28, up 15 percentage points year on year, due to a rapidly depreciating Brazilian real, high domestic crush demand, and robust China demand, market sources said Sept. 1.
The Brazilian currency has lost 29% of its value against the US dollar in the last 12 months, making Brazilian soybeans extremely competitive in international markets.
With the depreciating real and dry weather in the US Midwest, average soy prices in Brazil have touched multi-month high levels of $10.60/bu, market sources said.
Well-capitalized farmers are already taking advantage of these attractive prices to make substantial forward sales for their next crop. Brazilian soybean farmers have forward contracted 45% of next year’s crop, as of Aug. 28, up 20 percentage points on the year, sources said.
So many sensational allegation turned out fake or irrelevant. Some turned out true or believable. Is there a credible proof?
Interestingly, the allegation pertains to 2018 visit in France. Why did the anonymous accusers wait till now?
They waited because they knew it would be effective at this time. John Kelly is smarter than you think. He tried to keep the president from his worst instincts. And the comments come from multiple sources according to the Atlantic and Forbes.
“He could not understand why someone would die for their country”
Is there any possible remaining question as to what comes first for him–his personal interests or the country’s interests?
He would sell you out for an additional dime in his pocket.
In order to achieve something, you have to work for it. The more singlemindedly you work for your goal, the more likely you are to achieve it. Trump has achieved obtaining a position of great desirability. That alone tells you all you need to know about what his focus is on: No1, vs al manners of other distractions.
If you want there to be a chance that a President cares about the country, Presidents need to be picked at true random. Any bias at all which can be worked for, will drive out all those working for anything other than purely winning the race.
I happen to believe, naive or not, that Trump is the exception as President. His ambition is and always has been all about himself. Sure, other Presidents were driven people with large egos. But they understood sacrifice and higher calling and stewardship. They weren’t the narcissistic empty needy void that Trump is. His concern is solely about himself and what works out best for himself. Everything is for sale, with him.
True. That is why the much vaunted Athenian democracy selected people from various provinces by random choice (google Kleroterion), basically roulette, convinced as they were that elections would yield the worst people, namely, those who seek power. They called a system based on electing the ‘best’ candidate ‘aristocracy’, rule by the ‘best’. Democracy was originally a term of derision for the ‘demos’, rule by ‘country hicks’.
This is why there is a good argument for having more requirements for all public service jobs. You have to be qualified for nearly every other job but for serving in the house, senate or president the only job is to fool half the people some of the time. We now have unqualified people of all kinds in positions in federal government. Education is not even mandatory.
It is spelled Jinga. Close to vagina.