December 30, 2019

U.S. trade deficit drops sharply in November

Good news for president Trump continues (emphasis added):
The US trade deficit on goods narrowed sharply to USD 63.19 billion in November 2019 from USD 66.8 billion in the previous month and well below market expectations of USD 68.75 billion. That was the smallest trade gap since December 2016, as exports rose 0.7 percent, boosted by sales of vehicles (3.4 percent), consumer goods (2.6 percent), capital goods (1.3 percent) and foods, feeds, & beverages (2.0 percent). Meanwhile, there were declines in exports of industrial supplies (-0.7 percent) and other goods (-7.3 percent). Imports dropped 1.3 percent as purchases declined for consumer goods (-2.2 percent), capital goods (-2.0 percent), industrial supplies (-1.5 percent), foods, feeds, & beverages (-1.3 percent), and other goods (-6.8 percent). Imports of vehicles, however, increased 3.7 percent...   source: U.S. Census Bureau
United States Goods Trade Balance

A trade deficit means Americans are spending more, which tends to be a sign of a healthy economy.  But endless trade deficits are unsustainable.  In seeking to level the field for international trade, the president is not being anti-trade, he is being anti-America-being-taken-advantage-of-in-international-trade.  Declining trade deficits in the long run means that other nations are going to have to provide access to their markets in exchange for access to the lucrative American marketplace. That means better opportunities for American businesses and potentially better deals for American consumers if all nations concerned take advantage of their comparative advantage and trade fairly based on that rather than through currency manipulation, predatory pricing, intellectual property theft and poverty level labor markets.

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