Economy

The Trade Deficit Widens as Exports Plummet

JM Ashby
Written by JM Ashby

Our trade deficit widened during the month of August to the highest level since February of this year according to Census Bureau data.

The gap could be attributed directly to Trump's trade war as the drop in exports is being driven by falling demand for American agriculture. Agricultural exports dropped by nearly 10 percent in August.

From the Wall Street Journal:

Exports fell 1.6% while imports rose 0.7% in what looks to be the worst showing since February. [...]

Americans snapped up foreign autos, which rose by 3.2% during the month. But exports deteriorated — in part because of China’s sudden resistance to U.S. soybeans, as foods, feeds and beverages exports tumbled 9.5%. China has stopped buying soybeans in retaliation to the U.S. tariffs against the second-largest economy.

Here's the thing: this isn't going to change for the better.

These are the numbers for last month. August. Trump just dramatically escalated his trade war on Monday of this week by imposing tariffs on another $200 billion in imports from China and China is going to respond by imposing retaliatory tariffs on $60 billion in American goods.

There's no reason to think Trump will call off his trade war anytime soon, but even when it's over the global market could be permanently realigned in such a way that puts American exports at a significant disadvantage. It could take many years if not literally a decade to regain market access.

The longer Trump's trade war continues, the more American exports will be replaced.

  • RenoRick2

    Just watch the next GDP growth indicator. It was high as many people made purchases (AKA stocked up) before the tariffs hit. If it is higher than 2% next quarter I’ll be quite surprised.

    He is a fucking terrible negotiator! No wonder why any business he started failed almost immediately.

  • muselet

    Donald Trump is committed—yes, you see what I did there—to his inane trade war, or, more correctly, trade wars.

    Congress could rein in Trump’s madness by amending Section 232 of the Trade Expansion Act of 1962—which authorizes tariffs for reasons of “national security”—but congressional Rs will do no such thing.

    Ford announced on Wednesday that Trump’s tariffs on imported metals had cost the company $1 billion; Ford and other carmakers are warning of price hikes in the near future. Walmart has told the administration that prices will increase on a wide range of consumer products. Procter & Gamble is warning of job losses and price increases. None of this will have any effect on Trump, who is still crowing that his tariffs haven’t had a negative effect on the US economy.

    Trump will not back down in the face of opposition from affected industries, in the face of political pressure, or in the face of reality.

    I have this dystopian fantasy of Donald Trump, standing on a stage before teeming masses of poor and unemployed Americans who are one more missed meal away from food riots, and insisting, “It’s all fake news, folks, fake news. America’s doing great, we’re showing the world what greatness looks like. I won a historic Electoral College victory over Crooked Hillary because you wanted to Make America Great Again, and we’re doing it. We’re doing it.”

    Then the fantasy gets better when the crowd rushes the stage and drags Trump off to work in the coal mines for the rest of his life.

    Rebuilding America’s reputation will take two generations. Reclaiming America’s stature in the world may not be possible.

    (Wow, I’m in a modd today.)

    –alopecia

  • katanahamon

    After being forced to watch clips of his “press conference” in the comics’ clips I’ve seen, I think Rump has an organic brain problem, or has had a stroke. His speech is being affected..can’t everyone hear that? Granted, I was a musician for forty five years and listen rather acutely, but this is pretty obvious.. I’ve suspected this ever since he was elected, but I can’t understa why ppl are allowing a crazy, unhinged narcissist to continue to be president with such demonstrated, documented issues..

    • muselet

      I am not a doctor, but I don’t think Donald Trump has had a stroke or some other brain insult. What we’re witnessing is the result of his brain aging very badly.

      –alopecia