U.S. Trade Gap Shrinks as Exports Rise

[The Nature Boy 7,659]

https://www.wsj.com/articles/u-s-trade-gap-shrinks-as-exports-rise-1491309098

 

The U.S. trade gap with China shrank in the first two months of the year but remains far higher than a decade ago, part of a mixed trade outlook that sets the stage for potentially tense talks between President Donald Trump and Chinese leader Xi Jinping this week.

The overall U.S. trade gap with other countries narrowed nearly 10% in February from a month earlier to $43.6 billion, the Commerce Department said Tuesday. The gap was slightly smaller than economists surveyed by The Wall Street Journal had projected.

Meanwhile, the U.S. trade gap with one of its biggest trading partners, China, has narrowed nearly 5% in the first two months of this year compared with the same period a year earlier. Economists cautioned that trade data is particularly volatile and the latest month of figures may have been distorted by the timing of the Lunar New Year....Snip..

[IAMX 3,055]

It's nice and all but really it doesn't seem out of the ordinary when looking at data over the span of every month or year by year.. this is the last 3 years:

 

 

This was from a number of years prior:

 

 

 

 

 

 

It's a definite improvement overall over the last few years from 2005-2008 but I'd say it needs to get much better for me to start praising anyone. 

[OriZ 3,157]

Hate to be the one to always rain on everyone's parade(somebody's gotta be Maven's competition at that), but protectionism will not encourage growth. Growth in US domestic investment is a big contributor to GDP. It is typically associated with rapid deterioration in the US trade deficit(an implication of the savings-investment identity). For that reason, there is a very strong regularity across history: the quickest way to “improve” the US trade balance is to torpedo gross domestic investment, and the quickest way to “worsen” the US. trade balance is to enjoy a boom in gross domestic investment. 

 

Gross domestic investment must be funded by an identical amount of saving, of which there are three sources: US private saving, US government saving and foreign saving. Every time we import $1 of “stuff” from foreign countries, we pay for it by exporting $1 of “stuff” in return. That “stuff” can be either goods and services, or securities. By definition, if the US is importing more goods and services from foreign countries than it exports, it is also true the US is exporting more securities to foreign countries than it imports. So a “trade deficit” is equivalent to a “net export of securities,” which is equivalent to an inflow of foreign savings. When US gross domestic investment enjoys a boom(particularly when the US government is already running a deficit and US private saving is weak) the trade deficit typically widens considerably, and vice versa. I'll go away now.

 

Edited April 5, 2017 by OriZ