Publish date:

US Lead in Measured Technology Exports Peaked in 2014 and Is Sinking Fast

The US trend in net technology exports peaked in the first quarter of 2014.
Author:
US Tecchnology Exports and Imports Annualized 2021-Q2

I picked this idea up from a St. Louis Fed Tweet.

The St. Louis Fed says U.S. net exports of technology have fallen since 2011

The St. Louis Fed calculated things on a percentage of GDP basis. The raw numbers are easier to understand.

On that basis I calculate a different peak. 

US Net Peak vs Now

  • Net Peak: $80.57 Billion SAAR in 2014 Q2
  • Current: $62.88 Billion SAAR in 2021 Q2

Trade Deficit is Widening

Trade Balance by Quarter 2021-Q1

The above chart shows by balance of trade by quarter (Sum of Three Months). The data is through 2021-Q1. It is seasonally adjusted but not annualized.

The overall net surplus in services peaked in the first quarter of 2018 at $78,923 million.

The net quarterly trade deficit and goods deficits bot hit new records in the first quarter of 2021.

RECOMMENDED ARTICLES

Services, the one U.S. bright spot in net exports, peaked just as Trump launched massive trade wars against the world.

Make Trade Math Great Again

One of the problem with these numbers is they are distortions of trade math calculations. 

I have discussed this before. 

Please recall my July 2018 post Make Trade Math Great Again, iPhone Example with snips from The Conversation.

When an iPhone arrives in the U.S., it is recorded as an import at its factory cost of about $240, which is added to the massive U.S.-China bilateral trade deficit.

IPhone imports look like a big loss to the U.S., at least to the president, who argues that “China has been taking out $500 billion a year out of our country and rebuilding China.” One estimate suggests that imports of the iPhone 7 and 7 Plus contributed $15.7 billion to last year’s trade deficit with China.

But, as our research on the breakdown of an iPhone’s costs show, this number does not reflect the reality of how much value China actually gets from its iPhone exports – or from many of the brand-name electronics goods it ships to the U.S. and elsewhere. Thanks to the globe-spanning supply chains that run through China, trade deficits in the modern economy are not always what they seem.

Of the $237.45 attributed to China as an import, China gets $8.46. The result is US imports from China are overstated by $15- to $16-billion on the iPhone alone.

Is the US lead in technology really shrinking or is it just shrinking as measured?  

I suspect some of each but "as measured" at a faster pace. Regardless, trade wars did not and will not help.

Subscribe!

Like these reports? I hope so, and if you do, please Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

If you have subscribed and do not get email alerts, please check your spam folder.

Mish

Agricultural Exports Plunge, Trump Accuses China of Meddling in US Elections

The census dept reports the trade deficit widened by 5.3% with ag exports down 9.5%. Trump was already annoyed.

Peak Gold? No: Peak Gold Production? Perhaps

Some claim we have reached peak gold. It depends on what one means by the term. Perhaps we have reached peak production.

Freight Shipments Sinking Globally, US Joins the Parade: Global Recession Starts

The economic outlook based on freight shipments is growing dim.Global expansion has peaked.

Trump Threatens to Kill the Best US Net Export: Services

Services, especially education, are the only bright spot in the US trade picture. Trump threatens to kill that.

Gold Soars, Dollar Sinks After US Treasury Praises Weaker Dollar

The US dollar continued its plunge today after US Treasury Secretary said a weaker dollar was good for trade.

Goldilocks or Frankenstein: Saxo Bank "Technology Winter" Presentation

It's easy to see things the way you want, not how they are. Goldilocks or Frankenstein? Think about "peak expectations"

Remaking the TPP Without the US: US Ag Exports to Japan Will Plunge

The US left the TPP when Trump took office. The world moved on. It's now the CPTPP. Some call it the anti-Trump pact.

Trade Lie of the Day: Kudlow Claims US Exports to China Will Double

Round one of the US-China trade deal is allegedly "absolutely done". Let's investigate that and other claims.

Visualizing U.S. Exports & Imports

This is a guest post by Yuka Kato at HowMuch. The post covers imports, exports and trade imbalances between the US and the rest of the world.