The latest monthly U.S. trade figures were released this morning by the U.S. Department of Commerce:
- In March, the overall U.S. international goods and services deficit fell to $38.8 billion, down from $43.6 billion in February (revised).
- The monthly U.S. goods deficit with China declined to $17.9 billion in March, down from $23.4 billion in February.
- The U.S. goods deficit with Japan rose to $6.6 billion in March, up from $5.9 billion in February.
DATA: The decline in the trade deficit with China was almost exclusively due to a drop in imports of toys, games, and sporting goods; apparel; and, footwear, according to the Census Bureau. Imports shrunk by $5.4 billion from February to March.
Meanwhile, imports ticked up $1.3 billion from Mexico (primarily automobiles and computers), Japan ($1.2 billion), and South Korea ($0.5 billion).
Commented Alliance for American Manufacturing (AAM) President Scott Paul:
“This drop in the bilateral trade deficit with Beijing may be the first tangible sign of a shift away from China as the ‘factory for the world.’ Then again, it may merely be the result of lower domestic demand or a seasonal ‘swoon’ in the data. It’s really too early to tell.
“The U.S.-China data, looking back over more than a decade, shows March to regularly be the smallest or next-to-smallest bilateral monthly deficit in each year, so I’m not optimistic that it represents any sort of trend moving forward.
“I hope that the Administration’s new trade and commerce team will prioritize reducing the trade deficit in manufactured goods, particularly with China, at the same time that they're seeking to enter new regional trade agreements. There is no greater need for American manufacturing than a level playing field on trade and true reciprocity with our trade partners.”
AAM recently released a "Blueprint for Manufacturing" that includes a focus on trade policy. Specifically, the plan addresses China's undervalued currency, urges strong enforcement of U.S. trade laws, and presses for currency measures ahead of any potential Trans-Pacific Partnership (TPP). Some key recommendations in the plan:
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Keep our Trade Laws Strong and Strictly Enforced. We should refocus the trade agenda by giving American businesses new tools to counter currency manipulation, industrial subsidies, intellectual property theft, and barriers to market access by our trading partners.
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Combat Currency Manipulation. The president should convene a multilateral meeting to address global imbalances and, in particular, China’s mercantilism. He should ensure that the proposed Trans-Pacific Partnership includes measures to prohibit trade-distorting currency manipulation and the market-distorting impacts of state-owned enterprises. China ships more than a quarter of its exports to the U.S. and finances less than 10 percent of our public debt, so we have more leverage than some might suggest. If China does not agree to participate, they should be designated as a currency manipulator.
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Reduce the Trade Deficit. As the Administration works to double American exports, we should ensure that trade deficit reduction receives a high priority. Lowering the trade deficit and creating manufacturing jobs will have a positive impact on federal revenues and will reduce the federal budget.