GRAPH OF THE DAY: Look at all of those trade deficit skyscrapers
Remember a couple of days ago when we previewed the monthly data, coming from the Department of Commerce, on America's goods trade balance with China? Yeah, you remember, don’t even front. Anyway, it’s here! The new trade data is here! Oh man. It’s like Christmas morning for horrible children.
Let’s crack open this foul box of numbers and take a look. How did we do in December? Remember, we only needed a $22 billion goods trade deficit with China in December to get 2013 over 2012’s record $315 billion benchmark. Should we call the people at Guiness?
Yes. Call ’em up. America’s goods trade deficit with China in December was just shy of $24.5 billion. That makes for a 2013 deficit of $318.4 billion. Egads.
Today, February 6, 2014, the day the Senate voted to appoint one of its own, Max Baucus, as America's next ambassador to Beijing, the U.S.-China trading relationship is more one-sided than ever. Here’s a little graph for context:
What will the Baucus appointment mean for our China trade ties? Max Baucus is a complex figure. He pushed for normalized trade relations for China in 2000. And he called for a crackdown on its habit of currency manipulation in 2012. However he performs (and represents America's manufacturing interests overseas), he'll certainly be kept busy. Baucus is 73 years old, and a sleepy retirement his new post is most decidedly not.
But I digress. Remember that $318.4 billion figure? That’s just America’s trade deficit with China. While it’s easily the largest single trading relationship we have, it’s only one part of the larger sum. And America’s total goods trade deficit actually shrank by $38.2 billion in 2013. Still, that improvement “masks important structural shifts,” suggests Robert E. Scott of the Economic Policy Institute:
Although the U.S. goods trade deficit in petroleum goods declined by $59.0 billion (20.2 percent) the U.S. trade deficit in non-petroleum goods increased by $20.7 billion (4.6 percent). Growing trade deficits in non-petroleum goods have been a primary driver in the displacement of U.S. manufacturing jobs over the past decade. Trade deficits in non-petroleum goods, which have increased over the past four years, remain a substantial threat to the recovery of U.S. manufacturing employment.
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