August Trade Deficit Hits $53.2 billion; China Trade Deficit Sets Another Monthly Record

Paola Masman

Paola Masman Media Director, Coalition for a Prosperous America

New trade data from the Department of Commerce shows that America’s trade deficit continues to rise, with the August seasonally-adjusted deficit of $53.2 billion rising 6 percent above the July figure and a staggering 20 percent worse than the August 2017 figure of $44.2 billion. On a year-to-date basis, the trade deficit is running at $391 billion, up 8.6% on the comparable period for 2017. 

The escalating trade deficit is driven by two main forces: US economic growth outpacing much of the rest of the world—which leads to more imports, and a rising dollar that makes US exports less competitive worldwide and enables imports to take an increased market share. 

Record new goods deficit with China

The monthly US trade deficit with China set an all-time record of $36.8 billion. Year-to-date, US exports to China are up 5 percent at $83.6 billion while imports from China are up 8 percent, continuing a familiar trend. There is some good news, however. While the year-to-date deficit with China is up 8.8 percent, America’s worldwide goods deficit is up 9.7 percent in that period. This indicates that China accounts for a slightly smaller portion of the overall goods deficit.  

China trade has been volatile this year, with many importers speeding up imports to beat the tariffs imposed by both countries. It’s likely that the deficit with China will shrink due to tariffs, which now apply to some $250 billion of US imports from China, about half of total US-China trade. 

“The growing US trade deficit points to two critical things,” said CEO of CPA Michael Stumo. “First, we must continue to limit and reduce Chinese imports until Beijing shows signs of changing their illegal and unethical trading practices. Second, we need to take action to reduce the value of the US dollar. It has risen 7 percent so far this year above an already overvalued level. This makes our industrial and agricultural goods less competitive on world markets.”

On a bilateral basis, America’s largest deficit after China was with Mexico at $8.7 billion, a 6 percent increase over August 2017. Bilateral deficits with both Canada and Mexico worsened in August and for the year as a whole—likely reflecting importers rushing to bring in products ahead of a new trade agreement that could make it harder or more expensive to import goods (especially those containing components made outside North America).

The US goods deficit with Japan came in at $6.0 billion, better than the 2017 August figure of $6.6 billion. However America’s deficit with Germany increased to $5.9 billion—7 percent worse than the 2017 figure. 

Auto and tech sectors show increasing deficits

America’s goods deficit year-to-date is $573.9 billion, 8.4 percent worse than the corresponding period a year ago. And where last year’s total goods deficit was $807 billion, the US appears headed toward an $875 billion goods deficit in 2018. The non-petroleum goods deficit is even worse—10 percent worse than a year ago. The US continues to be a net importer of petroleum products (at $43 billion so far this year), so the overall non-petroleum deficit will not be as large as the total, but the trend is not good. 

The US automotive deficit came in at $18.3 billion in August, worse than July’s $17.6 billion. The advanced technology products deficit came in at $12.4 billion, slightly better than July’s $13.2 billion. But for the year-to-date period, America’s advanced technology deficit of $80 billion is a staggering 33 percent worse than the year-ago period. As usual, that deficit is driven by technology products and trade with China.

“The large and growing trade deficit with certain large nations and in many key industrial sectors weakens our industrial base, costs us millions of jobs, and hurts our farmers,” said CPA Research Director Jeff Ferry. “The Trump administration is doing the right thing in working to fix our worldwide trading relationships, and I would add that it is winning growing support from industry and other political figures as more people realize how awful our trade position has been for the US economy—and see the shockingly unethical behavior of certain of our trading counterparties.”

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Reposted from Coalition for a Prosperous America

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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