Oil, manufacturing, and China boost April trade losses
United States Business and Industry Council (USBIC) -- Manufacturing Business Technology, 6/10/2008 6:00:00 AM
The U.S. trade deficit jumped 7.81 percent in April to $60.90 billion from a revised March figure of $56.49 billion, as chronic U.S. shortfalls in not only oil but manufacturing, high-tech products, and goods trade with China all surged by double-digit levels. In fact, U.S. goods exports to economically booming China shockingly cratered by 10.59 percent in April. The total U.S. deficit that month was the highest figure since March 2007.
“Continuing non-oil trade losses deserve considerable blame for America’s recent economic stagnation, and threaten future prosperity as sharply as our oil addiction,” says Alan Tonelson, a Research Fellow at the U.S. Business and Industry Council. “They reflect ongoing trade policy failures by the Republican White House and the Democratic Congress that must become a top presidential campaign issue.”
Reflecting the historic spike in oil prices, the U.S. oil trade deficit soared by 14.18 percent in April, from $30.21 billion to $34.49 billion—the second highest total on record. Oil imports rose 12.08 percent for the month, from $136.82 billion to $141.65 billion—the highest total ever. By contrast, the non-oil goods deficit remained virtually unchanged in April, at $36.08 billion, as non-oil goods export growth outpaced import growth by 4.32 percent to 3.53 percent.
The trend, however, was nearly as bad for manufactures, which create the nation’s highest-paying jobs on average and generate most U.S. innovation and productivity growth. Despite the weak dollar, manufactures exports in April actually fell by 1 percent—from $80.85 billion to $80.04 billion—while imports increased 3.68 percent—from $123.14 billion to $127.67 billion. As a result, the April manufactures deficit shot up by 12.63 percent, from $42.29 billion to $47.63 billion.
On a year-on-year basis, though, the Jan.-April, 2008 manufactures deficit of $181.44 billion still stands 6.86 percent lower than the $194.80 billion figure for the comparable 2007 period.
America’s trade position in high-tech goods deteriorated even more sharply in April, with the longstanding deficit skyrocketing by 62.37 percent. April exports of high-tech goods slumped by just under 5 percent, while imports climbed 2.90 percent. Although the Jan.-April, 2008 deficit figure is 3.43-percent lower than the high-tech deficit for the same period in 2007, it is nearly 73 percent higher than the Jan.-April, 2006 high-tech deficit.
The 25.88-percent jump in the April U.S. goods trade deficit with China represented a sharp turnaround from March’s trade balance improvement, and highlighted a miserable month for U.S.-based producers versus their main foreign competitors.
Not only did U.S. goods exports to China plummet in April, but goods imports from the People’s Republic rose by 15.54 percent—by far the highest percentage for any major non-OPEC country. The U.S. goods deficit with the Euro-zone countries fared little better, rising by 20.67 percent to $7.47 billion, and marked as well by falling exports despite the dollar’s continuing decline versus the euro.
The U.S. goods deficits with NAFTA partners Canada and Mexico worsened in April by 18.63 percent and 14.23 percent, respectively. U.S. goods exports to the rest of North America increased, but imports rose considerably faster. The longstanding U.S. deficit with Japan inched up by less than one percent in April, as both exports and imports declined.
