Mhlnews 2869 Tradedeficit

U.S. Trade Deficit Down 12% in 2013 Thanks to Petroleum

Feb. 7, 2014
However, take fuel out of the picture and the deficit was up 4.6%.

The annual U.S. trade deficit in goods and services declined from $534.7 billion in 2012 to $471.5 billion in 2013, an improvement of $63.2 billion (11.8 percent), according to a U.S. Census Bureau report. This reflected a $24.8 billion (12.0 percent) improvement in the services trade surplus and a $38.3 billion (5.2 percent) improvement in the goods trade deficit.

However, the overall improvement in the goods trade balance was fueled by fuel. The U.S. goods trade deficit in petroleum goods declined by $59.0 billion (20.2 percent), while the U.S. trade deficit in non-petroleum goods[1] 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, says Robert E. Scott, Director of Trade and Manufacturing Policy Research for the Economic Policy Institute (EPI) an independent, nonprofit think tank.

“Growing trade deficits in non-oil goods reduce demand for U.S.-made goods, especially manufactured products, which make up more than 85 percent of U.S. goods exports,” he states. “China and the members of the proposed Trans-Pacific Partnership (TPP)[2] were important contributors to the growing U.S. trade deficit in non-petroleum goods in 2013. The goods trade deficit with China increased by $3.3 billion (1.1 percent) in 2013, and the U.S. trade deficit[3] with the 11 TPP members increased by an estimated $3.5 billion (1.4 percent).”

The EPI contends that U.S. trade and investment deals such as NAFTA, KORUS and China’s membership in the WTO have resulted in growing U.S. trade deficits and job losses and downward pressure on U.S. wages. It opined that the United States should stop negotiating new trade deals such as the TPP, and fix the ones we have.

[1] Includes miscellaneous adjustments

[2] Members of the Trans-Pacific Partnership (TPP) include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

[3] Transshipments are excluded from this estimate.

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