The latest monthly U.S. trade figures were released this morning by the Department of Commerce:
- In March 2012, the U.S. racked up an international goods and services trade deficit of $51.8 billion, up from $45.4 billion in February.
- The monthly goods deficit with China rose to $21.7 billion, up from $19.4 billion in February.
Said Scott Paul, Executive Director of the Alliance for American Manufacturing (AAM):
"The widening March trade deficit is bad news for the economy. For one thing, the expanding trade deficit means that growth in GDP will be lower. Surging imports from China indicate that we are falling into bad habits again—and that China is as well. Beijing has not meaningfully adjusted the Yuan’s value against the dollar this year. The large bilateral trade deficit, along with China’s announced trade surplus, show that China’s currency is still far below a market-based rate."
There are several actions Congress and the Administration could take right now to create jobs in America and lower the trade deficit:
1. House Speaker John Boehner should permit a vote on bipartisan legislation that would deter China from manipulating its currency. This bill would pass overwhelmingly, as it did in the Senate last year.
2. Treasury Secretary Timothy Geithner should designate China as a currency manipulator. While the value of China’s currency has risen somewhat against the dollar over the past year, it has stalled this year. The yuan still has a long way to go to reach equilibrium, and has only kept pace with the rate of change of the dollar’s decline against other major currencies.
3. The Obama Administration should launch a series of self-initiated trade cases against surges of Chinese imports in key sectors such as auto parts.
4. The President’s export initiative should evolve from an exercise in doubling exports to a strategy that dramatically lowers our trade deficit, particularly in high-value and strategic sectors of the economy.
5. The President and Congress should work together to pass a “Made in America” agenda that promotes reshoring, investing in our infrastructure, training a skilled workforce, leveraging federal procurement to support U.S. industry, and targeting tax breaks to domestic production.