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| Port of Savannah |
Maybe Trump Gets It
-By: Larry Walker II-
This year-to-date, the United States has imported $267.7 billion in goods from China, while exporting just $65.4 billion in goods to China. That amounts to a current year trade deficit of $202.3 billion, in the first seven months alone. Looking back over the last 30 years, the last time our mutual trade comprised any semblance of balance was in 1985.
Our trade deficit with China was a mere $6.0 million in 1985 (the last time it would amount to less than a billion dollars). From a trade deficit of just $6.0 million in 1985, the imbalance suddenly jumped to $1.7 billion by 1986. It has grown progressively worse almost every year since. Last year our trade imbalance with China reached a record $343.1 billion, and it is projected to end higher this year.
When the last three decades are summed, we find that the United States 30-year trade deficit with China amounts to $3.9 trillion. To top it off, the imbalance is clearly growing worse year by year. Although this has been great for China, it hasn’t been so great for the U.S.
U.S. Trade Deficits with China (1985 to 2015)
2015 $202.3 billion (through July)
2014 $343.1 billion
2013 $318.7 billion
2012 $315.1 billion
2011 $295.2 billion
2010 $273.0 billion
2009 $226.9 billion
2008 $268.0 billion
2007 $258.5 billion
2006 $234.1 billion
2005 $202.3 billion
2004 $162.3 billion
2003 $124.1 billion
2002 $103.1 billion
2001 $83.1 billion
2000 $83.8 billion
1999 $68.7 billion
1998 $56.9 billion
1997 $49.7 billion
1996 $39.5 billion
1995 $33.8 billion
1994 $29.5 billion
1993 $22.8 billion
1992 $18.3 billion
1991 $12.7 billion
1990 $10.4 billion
1989 $6.2 billion
1988 $3.5 billion
1987 $2.8 billion
1986 $1.7 billion
1985 $6.0 million
There are folks on both the left and right who say, “Free-trade is good for America, because it allows us to work less and buy cheaper goods.” Although it may be true that free-trade allows us to purchase more goods at lower prices, a problem arises when the exchange is so grossly out of balance. Although plausible on paper, the theory fails once we tally the last thirty years results. Looking back, we discover that not only has the U.S. lost $3.9 trillion in wealth (with just one country), but according to the Bureau of Labor Statistics, manufacturing jobs in the U.S. have declined from 18.0 million in 1985 to just 12.3 million as of August 2015.
The idea of working less and being able to buy cheaper goods might sound great to someone who’s working their behind off and doing well, but not so much for those forced to sit on the sidelines. As I recently commented on an Anti-Trump Trade Policy Video, “How is the guy, in your example, supposed to go to Wal-Mart to buy an imported Chinese TV, if he has no job and is stuck on food stamps, unemployment or welfare? And, why is the poverty rate in the U.S. higher than it was 30 years ago?”
If you think a policy resulting in the siphoning away of $4 trillion in national wealth and 6 million manufacturing jobs is somehow winning, then perhaps that’s why you’re not. Maybe Mr. Trump is more knowledgeable than thou, at least when it comes to the economy.
References:
U.S. Census Bureau – Trade in Goods with China
Bureau of Labor Statistics – CES Establishment Data - Manufacturing
U.S. Census Bureau – Income and Poverty in the United States: 2013