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Subscribe to RSSThe U.S. trade deficit widened slightly more than expected in December, and the bilateral trade deficit with China last year soared to a record high $295.5 billion.
The monthly trade gap swelled to $48.8 billion as goods imports climbed to the highest level since July 2008, just before the financial crisis caused world trade to plunge, a report from the Commerce Department showed on Friday.
Analysts surveyed before the report had expected the December trade deficit at $48.0 billion, up from a revised estimate of $47.1 billion in November.
U.S. exports grew slightly in December, with records set for petroleum, services and advance technology goods.
For the year, the U.S. trade gap rose 11.6 percent to $558.0 billion, the highest since 2008.
Exports last year rose 14.5 percent to a record $2.1 trillion, keeping the United States on pace to meet President Barack Obama's goal of doubling exports in five years.
Imports grew 13.8 percent to a record $2.7 trillion, with records set in several categories.
Auto imports rose to the highest since 2007 and petroleum the highest since 2008. The average price for imported oil in 2011 was a record high $99.78 per barrel
The record trade deficit last year with China is certain to reinforce concerns in Congress about Beijing's currency and trade practice ahead of a meeting next week between Obama and the Asian giant's expected next leader, Vice President Xi Jinping.
U.S. exports to China jumped 13.1 percent to $103.9 billion. But that was overwhelmed by a 9.4 percent increase in imports from China, which pushed the tally to a record $399.3 billion.
Last year, the Democratic-controlled Senate passed legislation to pressure China to raise the value of its currency, but that bill hit a dead end in the Republican-controlled House of Representatives.
Many lawmakers believe that China deliberately undervalues its currency to give its companies an unfair price advantage, contributing to the huge bilateral deficit.
The U.S. trade deficits with the European Union and Canada also expanded in 2011.
Copyright 2011 Thomson Reuters. Click for restrictions.
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In another article it says investors are bullish as the DOW approaches 13000. Average people who look at the nation's balance sheets (trade and government) have a very different outlook...
Quo Vadis, USA?
It would be nice if the Dow goes up above 15,000. Hopefully it would make any potential crash that much greater.
Its not just China, its Japan-Doing more unfair trade in destroying our Economy to support their Nation. Wake up America, their Greed for power is a serious problem with our Country.
Do any of you on board go to craft and art fairs? We have a lot in Chicago, and those items are MADE IN AMERICA. If you don't support the craft shows and buy, then stop whining about Chinese goods. BTW, we are now shifting our goods to Vietnam and India!
@Patriotic American - And our greed for power isn't a problem?
Sally, crafts are nice and all, but hardly a necessary part of living in the 2010's. If it can't make our life easier, more productive or more entertaining, it's hardly going to be a factor in our trade deficit. Besides, I have a feeling many of the items used are in fact made in China ... or Vietnam, Or india. The point is if it's not made in the US with US made goods and raw materials, the fact remains.
Sally,
I agree with your sentiment (even if crafts and arts aren't things I buy)...one way to get manufacturing to move back to the US is to only buy products made in the US whenever possible.
To make real progress I think we need a combination of trade and regulatory reforms. We need to setup a system where it's beneficial for companies to produce in the US (without destroying the environment).
That's true, and we should oppose it. We can let them know that we will flood the market with so many dollars that their reserve holdings will be worth no more than the price of a cup of coffee if they don't play fair.
Then there's the qusiling American businesses, that outsource jobs to a dictatorial government that mistreats its people. That doesn't really reduce the price that American consumers pay, but it does increase profits for a few wealthy Americans and one Communist dictatorship.
The Japanese also play that game deliberately undervalues its currency to give its companies an unfair advantage, contributing to our huge deficit. "GREED"
Here we go again.....another "significant" milestone in our deficit with China.
Yep, that Greek austerity is really going to help things out. Just wait until Greece DEFAULTS and see what happens to the EuRO and the Dow.
If you are "betting" on the DOW, hold onto your seat belts because you are going to have one wild ride DOWN when Greece collapses along with the rest of the EuRo.
The solution to our economy is: JOBS. More jobs = more consumer spending = less foreclosures = more Federal income = less food stamps, etc.
Yep, saying this for three years now. Wait a minute, Mr. Obama STILL has a "laser beam" on jobs even though his Jobs Czar has a "laser beam" on shifting GE jobs to China.
All you need to look at is Apple to understand how a growing trade gap pushes the Dow up. WE are buying goods from American companies that make them in China, India, Horrendous, Nicaragua, Canada and so on.
So while the trade gap widens 'American' companies, the executives and the share holders earn while the American employees get out sourced.
Yay people are spending again, consumer credit is going up, trade deficit up, mortgage settlement, greek austerity: all signs of great things and value in the Amerikan economy.
Alan,
I read your posts and I really do not understand what you want...are you rooting for a complete breakdown of our current society? If so, what form of government would you like to see?
I'm not being flippant - I really am curious to know what you advocate.
Eventually, the trade deficit is going to kill us if we aren't careful.
We need to be competitive and learn to export something besides dollars and jobs.
We sell them food and crude goods. In return, we buy computers, cars and parts, aircraft components and technology services.
Do you see a problem with this picture? We sell low-margin crap and buy high-margin finished goods in return. Is it any wonder that our trade deficits are so high?
We should place a 30% tariff on excess imports from China - they either buy from us as much as we buy from them, or pay 30% tax on the surplus. Simple and effective.
The challenge with this solution is that product prices would go up about 30% which would in essence be a consumption tax on the country. In the long run it might possibly stimulate growth in domestic manufacturing but my guess production would just move to another 3rd world country.
No, the prices would not go up, because the buyers for Walmart, Lowes, and other retailers would be forced to use MADE IN AMERICA goods. These corporations go after the biggest profit margins and do not care where the goods are made. US workers would have better jobs and thus even if prices did go up slightly - they could easily afford American made goods.
Prices of Chinese products would go up 30%. Therefore, prices of American goods would go up 29%. Simple and destructive. Plus, add the fact they would do the same thing to us. Net result? Higher prices and the same trade deficit.
Populist solutions are often more damaging than doing nothing.
Total BS above... I still remember times when most of the stuff in US stores was made in this country. Prices were fair and goods were high quality. And did I mention that we all had good paying jobs and could afford this stuff? The free trade junkies have been making their propaganda for several decades - and all this time we have seen only loss of good jobs and erosion of real earnings. The only thing that is different now is our TRADE POLICY.
Most retailers sell US made socks and China made socks for about the same price. But they make 5 times more selling Chinese socks. Guess which ones will they carry, genius? US consumer has a very limited choice, but we still have a choice. It is the buyers for retailers who deprive us of the ability to buy American, thanks to the US trade policies favoring international business.
Sounds good - sounds great in fact, but do you have any idea what sort of impact this would have? Do YOU want to pay 30% more for everything at Wal*Mart?
This is WHY we have such a trade deficit - all those cheap, crappy Chinese made products flying off the shelves at Wal*Mart.
Read my post again. 30% tariff would apply only on the SURPLUS exports from China. That would force China to buy more goods from US. When something is made in US our government benefits as well because of payroll tax. When something is made in China, nobody in US benefits.
What many Americans are unaware of , is that China is closing many factories and shifting/outsourcing that work to Vietnam, Philippines, Malaysia. On the other hand, companies such as Dell, Apple, Ford, General Motors, etc. are expanding production in China at current plants and newly built plants. They are in effect trading lower paying jobs for higher paying jobs. Everyone in China that wants to work, has a job.
More accurately, everyone in China who is ordered to work is doing so. Those who do not are in prison where they are forced to do things like farm online game currency for resale.
Deficits with China, Europe, Canada, and probably everywhere else in the world. In the meantime Americans seem to be content to sit here and whine about how unfair the world is.
How about realistically assessing what we're doing wrong? And beside, we have the Obama Administration that is going to provide welfare to everyone at the expense of the rich, so why worry?
Oops. Politically Incorrect.
Simply too expensive to do business in the US.
Free trade for them and unfair trade for us, the World is laughing at us. What a joke this Country is becoming. This free trade is destroying U.S. Manufacturing and has forced us to outsource our manufacturing to other countries. It his also caused millions & millions of our jobs to leave the Country.
Wow they (bsnbc) actually let you comment on this article instead of shifting you to facebook so the Government can monitor you. Usually any article critical of bsnbc or this administration is automatically shifted to facebook. Vinees, notice that anyone. Hellooooo.
They especially did not want comments about the Obama Administration arranging for people who purchased homes they could not afford to be rewarded for not paying their mortgages.
Thank you, letusreason. Proves not everyone is a horse's patute.
All this great economic news and the crowned democratic president wants to get the US involved in yet another civil war. Another article stated that France and Turkey have more at stake in Syria so let them take the initiative. Stop the madness and stay out of Syria, Somalia and everyother country Obama, the Nobel Peace Prize president, wants to invade.
Our government is so polluted with self interest and graft that a quick fix to these trade problems isn't possible. We need to remove all elected officials and start fresh to resolve our countries best interests for the 99%.
Import tax is the only fix!!! Import the same amount that we export to RED CHINA 200% tax on anything over...
Yeah, not like that would start a war or anything.
"Fair trade or no trade" Start a War, Sorry guy we are in a trade war now.
USA and China are members of WTO, so no 200% tariff.
Thanks Washington! Who's in charge there anyway?
No one but criminals.
No it would not start a stupid war. That is simply garbage handed to us by the same people who got us into this mess. The first thing to do is to get rid of the special deal in our tax code which allows U.S. corporations not to be taxed on profits made in China and then reinvested there. Apple has 80 billion dollars setting offshore and has paid no tax on the profit. Why is it that when we had duties on imports our economy was fine but when our corporate leaders, damn silly economists convinced us to eliminate duties our economy went into the toilet. Remember all those promises about millions of jobs to be created by dropping the duties? Yes, they were right millions of jobs in China. Americans are a bunch of saps.
"Did you know the Japanese closed their market by 86% to the United States"
Companies that have moved their production operations to China, better start thinking hard about bringing back their operations to US soil. When China, Russia and the other major players in the going to happen attack on Israel starts. all manufacturing for US companies will stop and China, who copies everything that is brought to them for manufacturing. Will be produced under their own control and all manufacturing companies will have no right, that they can back up, to force China's change. As things get uglier in the Middle East, there will be more cost and less control on how profits will be made, with everything in the world being produced in China. If you want to change China's financial hold on the world, which was stupid for countries to do, since they cannot force China to do anything and they do not care.
China will do what is good for China! Period!
"Last year, the Democratic-controlled Senate passed legislation to pressure China to raise the value of its currency, but that bill hit a dead end in the Republican-controlled House of Representatives."
Oh Booooooohner - you got some 'splainin to do!
This will persist as long as Obama pushes his anti-business, class warfare political strategy. Where companies choose to locate and operate is an economic decision. The more it costs them to operate here, the more they will do in other countries. It is that simple.
Your ideology is your ignorance, look what they did to our electronic industry. This is what they are now trying to do to our industry might. Everything we brought them for manufacturing they copied. I suppose you don't want the united states to be a industrial power anymore ? This includes China & Japan. Stop their greed for world domination, support your Nation-buy 100% American made from native American company.
and american's dominance of the world is ok? Talk about self-righteous!
We like capitalist dictatorships just fine but not socialist dictatorships???
Brought to you by the Corporate States of America!
China's currency is not under-valued, but the U.S. dollar is over-valued. That's the real problem.
The problem is identified, labeled, described, analyzed, and evaluated.....when is going to be solved?????
Until we adopt a fair trade, not free trade policy, the US will continue to decline. Is there any politician out there that can address these enormous trade deficits with China? I don't care if they are Republican or Democrat, they would have my vote.
The losers we put in Congress just standby and watch the world step all over us, its time to stop this with tariffs and new trade agreements. Asian countries are slowly, quietly tightening the noose around our neck by crippling our ability to produce for ourselves.
Hmmm...free trade for them, unchecked manipulation of their currency and Americans wanting a quick buck for their share holders and while were looking at China has anybody noticed how Japan has kept their economy propped up at our expense? Who is watching out for the United States? Does anybody know how? Does anybody in DC even care?
We as a nation of consumers are creating this unbalance of trade ourselves, in the checkout lanes of our favorite stores. Want to do something about this, quit buying foreign owned and manufactured goods when ever possible. If you can't find goods made in the United States by American firms disperse your money around the globe, by purchasing goods owned by non-Asian corporations and manufactured elsewhere such as Europe, Central, South and North America, for examples, rather than just the Asian nations. You hold the power in your hand and in your wallet.
Stop letting unions (legal mafia) hold our manufacturers hostage, hobbling them with overpaid and underproducing employees whose motto is "not my job".
Obama won't do anything, they might turn off the credit spigot.
Again we the consumers hold the power to turn the economic tides by the choices we make. Buy American made products from American companies and Americans workers and American companies prosper; buy Chinese products from Chinese companies and the Chinese population work and Chinese companies prosper instead. It's simple math. The choice is yours every time you make a purchase.