The government’s newest monthly trade figures show that the U.S. manufacturing trade deficit has hit an all-time high -- $63.93 billion for July 2012 – according to U.S. Business and Industry Council calculations.
The previous record for the deficit, a key measure of the nation’s manufacturing competitiveness, was October 2006’s $61.04 billion. Although 4.7% lower than the new record, that deficit was set when the economy was growing at a much stronger rate.
July’s manufactures imports of $144.87 billion were only the third highest in U.S. history, slightly lower than the $146.99 billion total in June and the $145.36 level reached in March. But July industrial exports of $80.94 billion were 9.4% below the June levels and represented the smallest monthly export total since January’s $77.15 billion. U.S. manufactures exports peaked in March at $93.67 billion.
The new record manufacturing deficit also represented that shortfall’s highest level as a share of any overall monthly U.S. trade deficit total. The July manufacturing trade gap was 52% larger than the total goods and services deficit. The previous high came in November 2010, when the manufacturing deficit exceeded the overall deficit by 47%.
“America’s new record manufacturing trade deficit shows that the U.S. economy still suffers major competitiveness problems, that a domestic manufacturing renaissance remains a distant and possibly receding goal, and that the nation remains painfully far from President Obama’s goal of ‘an economy built to last,’” says Alan Tonelson, research fellow with U.S. Business and Industry Council. “Without major changes in U.S. trade and manufacturing policies, further backsliding will be inevitable, and the nation’s current economic woes will be prolonged.”
USBIC’s calculations are based on Standard International Trade Classification (SITC) data compiled by the U.S. Census Bureau.