CPA Statement on US Trade Figures for April

June 12, 2018
CPA Research Director Jeff Ferry said: “Despite slightly better monthly trade data for the month of April, the US trade picture in 2018 continues to worsen. For the first four months of the year, our trade deficit year-to-date 2018 was $201 billion, 11.5% worse than the comparable period in 2017. At this rate, we are headed for an annual trade deficit well over $600 billion. Even worse, our goods deficit is heading for some $878 billion this year, which would be a worst-ever for the US goods deficit. 

“Looking at the bilateral data, our deficit with China also continues to worsen.  Our year-to-date goods deficit with China came in at $119 billion, 11.7% worse than a year earlier. If the trend continues, we’re looking at a China deficit of $419 billion this year with China, which would be our highest ever and of course the highest bilateral deficit between any two countries ever. The situation is similar with Germany, where our deficit was 11.9% worse in the January to April period, and on track to come in at $71 billion this year.”

“On the advanced technology front, our deficit for the January to April period worsened dramatically by 41% and we are heading towards a record $157 billion deficit this year in advanced tech, driven mainly by internet and communications equipment and biotechnology. Loss of our leadership in these sectors is a critical issue for the United States."

“The administration has implemented tariffs on steel, aluminum and other products but it is too soon to say if they will impact this year’s trade deficit. The fact that the US is growing faster than other major economies, combined with our strong import dependence makes us the target of choice for those nations running neo-mercantilist export-oriented economic strategies. The president has reportedly talked about his desire to see fewer Mercedes-Benzes on Fifth Avenue when he looks out the window at Trump Tower. The best way for foreign nations to maintain their shipments to the US is to begin to import more American products and help us bend the trend line upwards on our worsening trade deficit.”

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