The BEA's U.S. International Trade in Goods and Services report for August 2021 shows another record trade deficit.
- August exports were $213.7 billion, $1.0 billion more than July exports.
- August imports were $287.0 billion, $4.0 billion more than July imports.
- The August increase in the goods and services deficit reflected an increase in the goods deficit of $1.6 billion to $89.4 billion and a decrease in the services surplus of $1.4 billion to $16.2 billion.
- Year-to-date, the goods and services deficit increased $140.8 billion, or 33.7 percent, from the same period in 2020.
- Exports increased $244.3 billion or 17.5 percent. Imports increased $385.1 billion or 21.2 percent.
The trade deficit widened as imports rise 1.4% in August while exports rose only 0.5%.
The net impact was the widest monthly net deficit in history at -$73.25 billion.
Note that the US trade surplus in services is steadily shrinking. It's down from a peak of $26.72 billion to $16.16 billion now.
Biden Barks Up Trump's Tree
Biden is aware of the growing deficits and he will Continue Trump's Chaotic Policy on China, Just More Politely
If tariffs worked, Trump's tactics would have succeeded.
Tariffs are worse than useless. All they will do is drive up prices with inflation already raging.
Yet, Biden is threatening more of them.
Giant Sucking Sounds, Mexico, NAFTA, Global Trade, and Gold
Everyone wants to export to the US, and they do.
Trump did not fix the problem and Biden won't either. Neither understands the basic problem.
The Basic Problem
The "absence of capital controls has made the United States the default adjustment for global capital imbalances."
Gold was that capital control mechanism and now there are none. Trade agreements with China are not worth the toilet paper they are printed on.
How much longer this setup can continue before it blows up in a currency crisis, war with China, or some other major economic disruption remains a key mystery.
For discussion of why tariffs will not work including many charts please see Giant Sucking Sounds, Mexico, NAFTA, Global Trade, and Gold
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