U.S. trade deficit widens as exports hit 5-1/2-year low

The U.S. trade deficit widened more than expected in January as a strong dollar and weak global demand helped to push exports to a more than 5-1/2-year low, suggesting trade will continue to weigh on economic growth in the first quarter.

The Commerce Department said on Friday the trade gap increased 2.2 percent to $45.7 billion. December's trade deficit was revised up to $44.7 billion from the previously reported $43.4 billion. Exports have declined for four straight months.

Economists polled by Reuters had forecast the trade deficit widening to $44.0 billion in January. When adjusted for inflation, the deficit increased to $61.97 billion from $60.09 billion in December.

Trade subtracted a quarter of a percentage point from gross domestic product in the fourth quarter, helping to hold down growth to a tepid 1.0 percent annual rate.

In January, exports of goods fell 3.3 percent to $116.9 billion, the lowest level since November 2010. Overall exports of goods and services dropped 2.1 percent to their lowest level since June 2011.

I’m trying to remember the last time we did not have a trade deficit.

A perpetual Howdy-Doody trade policy invites corruption.

If we don’t negotiate tooth-and-nail to cut other countries’ tariffs and to keep US manufacturing from moving overseas, we flag in foreign lobbyists to bring in walking around money to bribe our elected officials.

Such as ...

Cynthia McKinney [who begged for money by kowtowing to an evil Saudi prince who happens to be part owner of FoxNews]

... and ...

The Clintons

Hillary’s emails reveal that they’ve been cutting the same kind of sleezy deals [even with terrorists] that were documented by the book, “Year of the Rat” [Chinagate] during Bill Clinton’s administration.

That is why so many statists embrace Howdy-Doody trade — lots and lots of ways to get your palm greased.

~~~

[Next I’ll post a column to ‘all’ written by Pat Buchanan.]

Patrick J. Buchanan: Trump Is Right on Trade

http://buchanan.org/blog/trump-is-right-on-trade-124822

http://www.freerepublic.com/focus/news/3399142/posts

Friday - February 19, 2016 at 4:24 am

By Patrick J. Buchanan

Republican hawks are aflutter today over China’s installation of anti-aircraft missiles on Woody Island in the South China Sea.

But do these Republicans, good free-traders all, realize their own indispensable role in converting an indigent China into the mighty and menacing power that seeks to push us out of Asia?

Last year, China ran up the largest trade surplus in history, at our expense, $365 billion. We exported $116 billion in goods to China. China exported $482 billion worth of goods to us.

Using Census Bureau statistics, Terry Jeffrey of CNSNEWS.com documents how Beijing has, over decades, looted and carted off the greatest manufacturing base the world had ever seen.

In 1985, China’s trade surplus with us was a paltry $6 million. By 1992, when some of us were being denounced as “protectionists” for raising the issue, the U.S. trade deficit with China had crossed the $10 billion mark.

In 2002, it crossed the $100 billion mark. In 2005, the $200 billion mark. In each of the last four years, Communist China has run an annual trade surplus at the expense of the United States in excess of $300 billion.

Total trade deficits with China in the Bush-Clinton-Bush-Obama era? $4 trillion. Total U.S. trade deficit in 2015 — $736 billion, 4 percent of our GDP.

To understand why Detroit look as it does, while the desolate Shanghai Richard Nixon visited in ’72 is the great and gleaming metropolis of 2016, look to our trade deficits.

They also help explain America’s 2 percent growth, her deindustrialization, her shrinking share of the world economy, and the stagnation of U.S. wages as manufacturing jobs are replaced by service jobs.

Those trade deficits also explain the rise of Bernie Sanders and Donald Trump.

Yet, with the exception of Trump, none of the GOP candidates seems willing to debate, defend or denounce the policies that eviscerated America — and empowered the People’s Republic.

Workers, however, know what our politicians refuse to discuss.

They are being sold out for the benefit of corporate elites who pay off those politicians with the big cash contributions that keep the parties flush.

Politicians who play ball with Wall Street and K Street know they will be taken care of, if they are defeated or when they retire from public office, so long as they have performed.

Free trade is not a zero-sum game. The losers are the workers whose jobs, factories and futures are shipped abroad, and the dead and dying towns left behind when the manufacturing plants shut down.

America is on a path of national decline because, while we have been looking out for what is best for the “global economy,” our rivals have been looking out for what is best for their own nations.

Consider OPEC, which is reeling from the oil price collapse. Russia is colluding with Saudi Arabia and Iraq to cut production to firm up the market and prevent prices from falling further.

This is pure price fixing, but we all understand self-interest.

What might a U.S. national-interest-based trade policy look like?

Controlling the largest market on earth, we might impose on foreign producers a cover charge, an admissions fee, a tariff, to get into our market.

Example: Impose a 20 percent tariff on foreign cars entering the USA. This might raise the cost of a Lexus or Mercedes produced and assembled abroad from $50,000 to $60,000.

However, if Lexus or Mercedes buys or makes all their parts in the USA and assembles all their cars here, no tariff. Their cars could still sell for $50,000. This would be a powerful incentive to shift production here. As an added incentive, all tariff revenue could be used to reduce or eliminate corporate taxes in the USA.

Between the Civil War and World War I, under Republicans, the U.S. became the world’s greatest industrial power and a wholly self-sufficient nation. How? We taxed foreign goods entering the United States, but did not tax the profits of U.S. companies or the incomes of U.S. workers.

The difference between economic patriots and globalists who inhabit corporate-funded think tanks and public policy institutes is that the latter think of what is best for their corporate benefactors and the global economy. The former put America and Americans first.

Academics revere Adam Smith, David Ricardo and Richard Cobden.

But none of them ever built a great nation. Patriots look to Alexander Hamilton and those post-Civil War Republicans who built the greatest national industrial powerhouse the world had ever seen.

Indeed, what great nation did free trade ever build?

As father of a united Germany, Chancellor Bismarck said, when he decided to build Germany on the American and not the British model, “I see that those countries which possess protection are prospering, and that those countries which possess free trade are decaying.”

So it is true today. Unfortunately, it is America, now wedded to the fatal dogma of free trade, that is decaying.

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