The Census Bureau International Trade report shows that the goods and services deficit was $43.7 billion in July, up $0.1 billion from $43.5 billion in June, revised. July exports were $194.4 billion, $0.6 billion less than June exports. July imports were $238.1 billion, $0.4 billion less than June imports.
The country-specific details may have Trump howling. The Deficit widened with China, the EU, and Japan.
Trade Balance North America and Europe
Trade Balance Rest of World
Largest Deficits Current Month
- China $33.5 Billion
- Japan $5.6 billion
- Germany $5.5 billion
- Italy $2.8 billion
- Ireland $2.4 billion
- India $2.1 billion
Despite embargoes and sanctions, the US has a trade deficit with Russia that tops $1 billion.
Mike “Mish” Shedlock
Wish the powers that be (in Washington) would put the same emphasis on the causes of the trade deficit as they do on sales figures.
Why do schools focus on political correctness and sports, while neglecting math and science? Why is compliance to political extremism so important to college professors, but getting a job after graduation selling out to capitalists? Why is getting a skilled craftsman job (welding, carpentry, electrician, plumber, etc etc) such an evil thing?
If we want to build stuff domestically (instead of whatever trade deficit), we need skilled people to build it. We need smart entrepreneurs to market and sell it.
We don’t need social justice warriors to whine endlessly. We don’t need bureaucrats and lobbyists and lawyers to issue ridiculous rules to benefit themselves at the expense of everyone (foreign and domestic).
A malfunctioning education system is the true cause of the trade deficit
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The Netherlands is an interesting anomaly.
Is our surplus with them due to Shell operations in the US, Phillips factories here, weird multinational tax minimization schemes, or what?
It can’t all be from Humboldt county farmers supplying their coffee shops…….
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And that’s with a dollar that’s going down…
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NBER paper stating the obvious:
“Based on CPS data from 1980-2015, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers, and increases the likelihood that low-skilled workers in automatable jobs become unemployed.”
http://www.nber.org/papers/w23667?sy=667
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Imports of crude from Russia went from 1.8M in June to 3.1M barrels in July. So that accounts for $60m of the $300M increase. What the hell else is imported from Russia?
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High tech rocket engines
Launch services (since we have none for manned launches)
Engineering
Gold and other minerals (to include rare earth)
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Softwood lumber imports from Russia and other countries surged after the US put tariffs on Canadian lumber imports. Prices surged as well.
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This will increase rebuilding costs after Harvey and Irma.
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Mish as I know you remember that back in the 80’s when Reagan was president the dollar got so strong it led to the Plaza Accords when Japan, France, West Germany, United Kingdom and the US secretly( yea ok) decided to depreciate the dollar to help reduce our trade deficit and help our multinational companies compete on a more level playing field. I remember back then our car manufacturers all saying if they just get the dollar down the yen up we’ll kick their ass against all these cheap Japanese auto imports. Well I think the dollar went down and maybe even overshot the target on the yen. Now Im guessing here but think I’m right that overall it did help us quite a bit at first. Then many of our multinational companies including autos, figured out they could make a lot more money by simply raising prices to increase the earnings to get the stock up so their stock options would make em rich. So many of our competing companies were working hard to increase market share a much more responsible way to operate for the long haul. That’s not the whole story now with China and others seem to always be able to manufacture products a whole lot cheaper than we can, but now with the robots taking over it’s awfully hard to tell where the jos are going to be in the US moving forward from where we are now.
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the rare earth imports will be problem IF Russia cuts us off…
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If the Fed would stop juicing the money supply through interest rate manipulation in conjunction with lending, and allow natural deflation to flourish, maybe we wouldn’t need to increase imports from China in order to keep prices down (think Walmart.) Then Trump as well as the 99% would be happy. Only the 1% (or possibly more likely the top 1% of the 1%) would be disgruntled. Whenever you can get a 99:1 win:loss ratio, I call that a win – a big win.
Shallow analysis, I know, but hey, kinda guy I am, lol.
_aleph_
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