Free Republic

If you were troubled by President Obama's "Wow Bow" in Japan, you won't be any happier with the "kowtow" during his just-concluded trip to the People's Republic of China. In the latest chapter of Team Obama's at-best-mediocre, teetering-on-the-disastrous foreign policy, the president and a slew of Cabinet secretaries roared into Asia like lions, promising a new era in US diplomacy in the region. But they're leaving like pussycats -- accomplishing, well, a whole lot of nothing so far. So much for our "first Pacific president," as Obama anointed himself at the start of the eight-day, four-country swing through Asia last...

The U.S. trade deficit expanded in September by the most in a decade as rising imports of petroleum, autos and manufactured goods from China wiped out an otherwise impressive gain in exports, which reached their highest level since December. The trade gap jumped 18.2 percent, widening from $30.8 billion in August to $36.5 billion in September, the Commerce Department reported Friday. It was the largest monthly imbalance since January but it remains well below the peak deficit of $65.9 billion in July 2008, when oil prices reached record levels just before trade flows collapsed around the world. (snip) Exports in...

Earlier today, Doug Bandow weighed in with some commentary on the problems that Buy American provisions are creating for both Canadian and American businesses. Let me reinforce his view that such rules are anachronistic and self-defeating with some thoughts from a forthcoming paper of mine about the incongruity between modern commercial reality and trade policies that have failed to keep pace. Even though President Obama implored, “If you are considering buying a car, I hope it will be an American car,” it is nearly impossible to determine objectively what makes an American car. The auto industry provides a famous example,...

If the U.S. trade deficit were to disappear, do you think that would be a good or bad thing? For years, many in the media and the political world wailed about the U.S. trade deficit, but it is rapidly disappearing -- and the consequences are going to be disastrous. [snip]Over the past several decades, many foreign countries -- notably Japan and China -- exported much more to the United States than they imported, and as a result, they accumulated several trillion U.S. dollars. Most of those dollars were, in turn, invested back in the United States. [snip] However, when trade...

<p>BEIJING – The contraction in China's manufacturing worsened in March, data showed Wednesday, and President Hu Jintao told a state news agency that the country's economic problems are increasing.</p> <p>The purchasing managers index by brokerage CLSA Asia-Pacific Markets — based on a survey of some 400 companies — showed manufacturing shrank for an eighth month. It fell to 44.8, down from February's 45.1, on a scale where numbers below 50 show activity is shrinking.</p>

Today’s TIC data … Posted on Monday, March 16th, 2009 By bsetser John Jansen is right; today’s TIC January data was a disaster. $150 billion in (net) capital outflows (-148.9 billion to be precise) cannot sustain even a $40 billion trade deficit. I also though have learned that the TIC data doesn’t necessarily match the trade deficit on a monthly basis — and on occasion it moves in ways that seem inconsistent with the market. If the big outflow had come in December (a month when the dollar slid) rather than January, the flow data and the market move would...

U.S., China Seek Healthier Relationship By MARK GONGLOFF MARCH 13, 2009 AHEAD OF THE TAPE Wall Street Journal Us Trade Deficit with China going down ? LOOK AGAIN.

Japan’s January exports down 45% year on year TOKYO, Feb 25 - Japan’s exports nearly halved in January from a year earlier, pushing its trade deficit to the biggest on record, in further evidence that the global financial crisis is paralysing the world’s second-largest economy. Exports to Asia slumped at a record pace as manufacturing within Asia, which had thrived on robust global growth until last year, slumped as Western consumers curtail their spending. ”Exports to Asia, particularly to China, are tumbling at about the same pace as shipments to the United States, signalling that even China’s economy may be...

Can the United States run a trade deficit - where the United States imports more than it exports - forever?Most commentators have argued the big trade deficits the United States has run over the last couple of decades eventually will cause great economic hardship or even disaster in the United States. In fact, the United States has run trade deficits for most of its history, and the disaster has yet to strike. How can this be?Federal Reserve economists recently examined the data carefully and come up with solid explanations. The following summarizes and simplifies some of their key findings as...

From the producers of Wordplay and the studio that brought you Supersize Me, the must-see documentary I.O.U.S.A. uncovers the source of critical economic concerns that touch the lives of every American. A tapestry of archival footage, hard data and candid interviews woven together, it paints an authentic profile of today’s economic condition. Solutions for how we can impact this nationwide crisis and evolve into a more fiscally sound nation for future generations are offered by the documentary’s powerful conclusion. “May be to the U.S. Economy what An Inconvenient Truth was to the environment.” - Reuters

Trade Facilitation by: Ben Giles, July 15, 2008 The Cato Institute’s Daniel Ikenson and World Bank’s Simeon Djankov presented the findings of a new Cato trade policy analysis at the Rayburn House Office Building on July 11. Ikenson’s paper, entitled Protection without Protectionism: Reconciling Trade and Homeland Security, highlights the disconnect between Americans’ perception of the economy and the realities of international trade. “The polls tell us that Americans have soured on trade…” said Ikenson. “It’s because Americans are barraged nightly by reports on the news that they’re losing their jobs and that the economy is imperiled by globalization and...

Feb 21, 12:34 AM EST Japan posts trade deficit in January due to rising oil prices TOKYO (AP) -- Japan's trade deficit in January was more than 20 times greater than the deficit in the first month of 2007 as rising oil prices boosted the values of imports, the Finance Ministry said Thursday. The gap widened to 79.3 billion yen (US$734 million; €501 million) from last year's 3.5 billion yen, the ministry said. The results were far worse than the 5.6 billion yen (US$52 million; €35 million) deficit estimated by economists polled by Dow Jones and Nikkei. Japan normally runs...

Last week, NRO TV featured a video discussion series about the economy featuring Peter Robinson and economists John Taylor and Kenn Judd. I thought you’d want to check it out. You can view “The Economy According to Taylor and Judd” in entirety here: http://tv.nationalreview.com/uncommonknowledge/. You can also watch specific segments of the discussion from that link: Chapter 1: Recession Chapter 2: Sub-prime Crisis Chapter 3: Economic Stimulus Package Chapter 4: Economy as a Campaign Issue Chapter 5: Tax cuts vs. Spending cuts

Contrary to popular wisdom, China's rapid growth is not hugely dependent on exports MOST people suppose that China's economic success depends on exporting cheap goods to the rich world. If so, its growth would be seriously dented by a stuttering American economy. Headline figures show that China's exports surged from 20% of GDP in 2001 to almost 40% in 2007, which seems to suggest not only that exports are the main driver of growth, but also that China's economy would be hit much harder by an American downturn than it was during the previous recession in 2001. If exports are...

"Toyota Motor Corp. overtook Ford Motor Co. to become the No. 2 automaker by U.S. sales in 2007, using new products and relentless strategy to break Ford's 76-year lock on the position. Toyota sold 2.62 million cars and trucks in 2007, which amounted to 48,226 more than Ford, according to sales figures released Thursday. Toyota's sales were up 3 percent for the year, buoyed by new products like the Toyota Tundra pickup, which saw sales jump 57 percent. Ford's sales fell 12 percent to 2.572 million vehicles."

As the trade deficit between the United States and China continues to increase, should Americans be worried? Or should they be cheering China’s trade liberalization and enjoying the bargains? The Hoover Institution has just released “The U.S.-China Trade Deficit: Reason for Worry?” It’s a good summary of the China-U.S. trading arrangement, and it addresses both benefits and concerns about the relationship as expressed by both Chinese and American parties. http://www.hoover.org/research/focusonissues/focus/12436706.html

U.S. Manufacturing Obituaries Premature by: Heyecan Veziroglu, December 03, 2007 Instead of mischaracterizing the significance and meaning of the U.S. trade deficit and assuming that the loss of 3 million manufacturing jobs four years ago requires a tough response today, policymakers should try to attain a better understanding of the condition of U.S. manufacturing, Cato Institute policy analyst Daniel Ikenson pointed out in a Capitol Hill briefing that the think tank held recently. While the U.S.-China trade deficit for goods and services combined has been growing at approximately 23% per annum, the United States remains the world’s most prolific manufacturer,...

WASHINGTON (AP) -- The U.S. trade deficit fell to the lowest level in 28 months as a falling dollar spurred U.S. exports to an all-time high. The deficit with China jumped to the second highest level on record as imports of toys and other goods surged despite a rash of safety recalls. The Commerce Department said Friday that the deficit for September dipped by 0.6 percent from the previous month -- to $56.5 billion. That was the narrowest trade imbalance since May 2005 and took economists by surprise. They had been forecasting the deficit would rise. The improvement came from...

<p>George Lesser expressed the usual awe-struck reaction to Shanghai ("Oil for the lamps of China," Commentary, Oct. 21). I first saw the magnificent skyline at night, on a long cab ride from Hongqiao International Airport down to the waterfront Bund, across from the imposing new developments in Pudong.</p>

Trade: Media reports are filled with the "good news" that the trade deficit has shrunk — or rather, as pundits and headline writers like to say, "improved." But is a smaller deficit really a good thing? Maybe not. "Trade Deficit Improves Significantly," the Associated Press headline said, in a sentiment that is likely to be repeated in dozens of newspapers across the country. Thanks to the weaker dollar, the trade red ink fell 2.4% to $57.6 billion in August. Exports rose 0.4% to a record $138.3 billion, while imports fell by the exact same amount to $195.9 billion. As economist...

WASHINGTON (AFP) - Even as protests grow about US imports from China, many Americans may find it hard to manage without the range of products that dominate or in some cases monopolize the marketplace. Safety concerns over Chinese-made goods prompted further comments in Congress over the past week and led President George W. Bush to establish a new panel to review the safety of imported goods. Yet economists and consumers say that Chinese-made products have become so ubiquitous it may be next to impossible to wean Americans off low-cost imports. Sara Bongiorni, a journalist and author of "A Year Without...

The first shipments of Chrysler cars built by China's Chery Automobile Co. could reach the U.S. or Europe within 30 months, Chrysler said on Wednesday, opening the door for Chery to be the first mainland auto maker to do so. "The first product within one year, and then into the United States and western Europe within two to 2- years," Chrysler Group chief executive Tom LaSorda told reporters. The first auto built by Chery Automobile Co. for Chrysler could be exported to North America, but not the United States, said LaSorda, who made the forecast at a Beijing signing ceremony...

Why trade deficit matters By Hans D. Baumann InTech News, May 1, 2007 The U.S. trade deficit could affect the future of your jobs, the location of our plants, and it might even cause the next recession. Our current trade deficit with China has reached $21 billion per month. It means we bought $21 billion more in one month from China than the value of goods we sold them. This makes the trade deficit with China alone about $250 billion on a yearly basis. Adding the trade deficits with Europe and Japan, among others, we had a record total...

Remember: The June 1989 Tiananmen revolt was fueled not just by a desire for more freedom, but by anger over high inflation.

I'm told to worry about the trade deficit. Commentators and populist politicians are wringing their hands. The trade deficit is a "malignant tumor in the intestines of the U.S. economy," says Pat Buchanan. Lou Dobbs is very upset that "We're borrowing about $3 billion a day just to pay for our imports"! Economists had taught me that the trade deficit is not a big deal. (The budget deficit may be a big one, but that's a different issue.) But with all the pundits and politicians alarmed, I began to wonder if I was out of touch. ... What the trade...

AP - China's 2006 global trade surplus jumped nearly 75 per cent from the previous year to a record $US177.5 billion ($A227.7 billion), a state news agency said on Wednesday in a report that could fuel US complaints about market barriers and currency policy. China's trade gap has soared as it became the world's low-cost manufacturing centre, churning out furniture, toys, shoes and other goods, often for sale under foreign brand names. The jump in the trade gap came despite a small but steady rise in China's currency, the yuan, over the past 18 months. Washington is pushing for a...

WASHINGTON - America's deficit in the broadest measure of trade shot up to an all-time high in the summer, reflecting the huge jump in the country's foreign oil bill. The Commerce Department reported Monday that the current account trade deficit increased 3.9 percent to a record $225.6 billion in the July-September quarter. That represented 6.8 percent of the country's total economy, up from 6.6 percent of the gross domestic product in the spring quarter. The current account is the broadest measure of U.S. trade because it tracks not only the flow of goods and services across borders but also investment...

PROMOTING GOLDMAN ON GOVT TAB by Jim Willie CB December 13, 2006 US Treasury Secy Hank Paulson and USFed Chairman have embarked upon yet another trip to China, joined even by Commerce Secy Gutierrez. This Strategic Economic Dialog between the Untied States and China deserves comment. The official reasons stated are to discuss economic and banking reforms, more like a begging session for China not to torpedo the USEconomy. In my opinion, that is in part a cover smokescreen. Paulson publicly cites the need for China to make quick progress on economic changes toward an open market society, like with...

"WASHINGTON (AP) -- America's trade deficit posted a dramatic decline in October, falling to the lowest level in 14 months as the price of crude oil plunged by a record amount. But America's deficit with China hit an all-time high, reflecting a surge in shipments of toys, televisions and computers as retailers stocked their shelves for holiday shoppers. The Commerce Department reported Tuesday that the deficit fell to $58.9 billion in October, down 8.4 percent from September. The percentage drop was the biggest since December 2001. It pushed the monthly deficit down to the lowest level since August 2005. The...

Oil producers shun dollar By Haig Simonian in Zurich and Javier Blas and Carola Hoyos in London Published: December 10 2006 Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements. The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency. Market liquidity is traditionally low in December, and many traders have locked in...

Dangers in a Dollar on the Edge By Robert J. Samuelson Friday, December 8, 2006; Page A39 Let's face it. Foreign exchange markets are not mass entertainment. They're not the NFL, MTV or MySpace. So you might have missed the latest excitement of the sliding dollar. Who cares if the euro is now worth $1.33 instead of the $1.28 it was worth on Nov. 20 -- a 4 percent loss for the dollar? Well, we all should. The dollar's mysterious movements pose one of the thorniest economic questions of our time: Can the world economy thrive without the massive stimulus...

...NOT THAT THE DOLLAR NEEDS MUCH INDUCEMENT these days to decline. The euro soared past $1.33 last week, which was less than three cents shy of its peak in its relatively short existence, which was touched on New Year's Eve of 2004. The British pound, whose history goes back a bit further, was closing in on two bucks at $1.98, the highest since George Soros made his killing when sterling was kicked out of the Exchange Rate Mechanism in September 1992... "...Gregory Weldon points to a pertinent quote from Deputy Governor Wu Xiaoling of the People's Bank of China about...

NEW YORK (AP) -- The dollar fell Thursday to its lowest level against the British pound in 14 years and lost value against the euro and Japanese yen. The dollar's decline came on mixed economic news from Washington and positive developments in Germany, Europe's largest economy. The Commerce Department said consumer spending increased in October after two lackluster months, but the nation's retailers reported mixed results in November. The Labor Department also reported that the number of Americans filing new claims for unemployment benefits posted an unexpectedly large increase last week, rising by 34,000 to 357,000. Meanwhile, Germany said that...

George Mason University economics professor Russell Roberts, who runs the CafeHayek blog along with his colleague Don Boudreaux, has put together a short but sophisticated presentation about the trade deficit and its effect on domestic employment. Roberts seeks to rebut the common claim that the trade deficit leads to a loss of American jobs (recall Ross Perot's "gaint sucking sound" comment). Roberts' analysis is convincing. I won't repeat his analysis here, but I would like to make a few related comments. As any reader of CafeHayek knows, the "trade deficit" does not represent a draining of wealth from the United...

Better way to handle Asian currencies By James Dorn, Financial Times, October 24 2006 Calls for government co-ordination of exchange rates to manage global imbalances are misguided. For a lesson in how exchange rate intervention can wreak monetary havoc, just look to the Plaza and Louvre agreements. The Group of Five industrialised nations – the US, the UK, Japan, Germany and France – met in New York in 1985 to agree on collective action to lower the value of the dollar. China was not a factor as its foreign exchange reserves were only $12.7bn and its overall current account was...

The US trade deficit hit a fresh high of $68bn in July, due to the cost of crude oil imports reaching a new record, official data has shown. The figure was up 5% on June's deficit, and the gap for 2006 as a whole is now set to exceed 2005's record $717bn. While US exports of goods and services fell 1.1% to $120bn in July, the Commerce Department said total imports rose 1% to $188bn. Crude oil imports in July totalled $28.5bn, pushed up by high prices.

WASHINGTON (AFP) - The US trade deficit has surged to a record 68 billion dollars in July as rising oil prices created a mammoth fuel bill for the world's largest economy. Economists warned that the import boom could worsen the flagging economy's performance in the months ahead. The new high reported by the Commerce Department compared to June's deficit of 64.8 billion, and was much bigger than Wall Street's consensus forecast of 65.5 billion dollars. The deficit is on course to smash last year's annual record of 717 billion dollars. In the first seven months of 2006, the trade gap...

Panama is planning to build a deeper, wider Panama Canal to allow Communist Chinese super-containerships carrying cheap 21st century slave-labor under-market goods to have direct access to the Gulf of Mexico and key NAFTA/CAFTA ports such as Miami. In the shipping industry, Panamex container ships are defined as those that are able to fit through the 1,000-foot long and 110-foot wide canal. Typically, Panamex containerships were designed to carry 4,500 TEU (“Twenty Foot Units,” the length measurement of the standard ocean steel container). The first generation of post-Panamex container ships was built to carry up to 9,800 TEU. Today, a...

All Headline News reported that Japanese exporters are trying to take advantage of the rise in the Yen rate. When the dollar spikes, they try to sell it in order to save up for later purchases in the year. The current yen rate hovers around 114 yen = $1. I remember when it was 260 yen = $1. Some of my missionary friends tell me of a time when it was 350 = $1. When Japan started to produce quality products for very affordable prices, everyone started crying 'foul' and 'undervalued,' and then trade imbalances started growing. In the end,...

Excerpt: Although its future looks bright—the only by-product of a hydrogen fuel cell is water, and experts believe they can one day be used to create electricity to fuel cars—the cost and energy required to create hydrogen has taken it out of the running as a near-term energy alternative to oil. That may be about to change. Researchers at GE’s Global Research lab in Niskayuna, NY, have developed a system that produces hydrogen at a fraction of the cost and could be available commercially in just a few years... (full text at Popular Mechanics url)

WASHINGTON (AP) -- For the first time in more than two years, the U.S. trade deficit has declined for two months in a row. The main reasons: record U.S. exports and a big drop in the country's foreign oil bill. The trade gap narrowed to $62 billion in March, the smallest deficit in seven months, the Commerce Department reported Friday. It was down from a $65.6 billion imbalance in February and an all-time high of $68.6 billion in January. It marked the first consecutive monthly improvements in the deficit since October-November 2003 and offered hope that the country's trade deficits,...

Summary of America's Current Economic Condition... the Editor 1. Wholesale sellout of core strategic assets to foreign acquirers: according to official figures, more than 8,000 American companies have been sold to foreign corporations in the last 10 years 2. Decline of vital industries through bankruptcy, foreign predatory competition, and foreign acquisition: examples include steel, publishing, clothing, machine tools, automobiles, electronics, and others 3. Inability to manufacture competitively: American manufacturers suffer a 22 percent structural cost disadvantage compared to overseas competitors through taxes, health and pension benefits, litigation, regulation, and rising energy prices 4. Overdependence on imports: $1 in $4 of...

The United States must borrow more than $2 billion per day from foreigners to finance its huge trade deficits. In 2005, for example, there was a record deficit of $805 billion in the current account, the broadest measure of trade. Foreigners sell their televisions, cars and oil to Americans and hold dollars in return. Those dollars are invested in stocks, bonds and other assets, including real estate and factories. Foreigners already own half of the U.S. government's publicly traded debt. As of January, some $2.19 trillion in Treasury securities were in the hands of central banks, including China and Japan,...

U.S. Commerce Secretary Carlos M. Gutierrez REMARKS TO ASIA SOCIETY March 14, 2006 Washington, DC(Remarks As Prepared for Delivery)   Thank you for those kind words, Diana. I also want to thank the Asia Society for its leadership in promoting understanding between America and the countries in the Asia-Pacific region. As our economies have become more interconnected, I know your educational programs have expanded to include globalization. Today I'd like to focus on one critical aspect: the U.S. China economic relationship. As you know, President Bush and this Administration strongly believe in the power of free and fair trade...

For at least the past 30 years protectionists have warned that the trade deficit will lead to ruin, but . . . Since the mid-1980s the trade deficit has risen when the economy has grown and receded when the economy has faltered . . . . . . In the national income accounts, the mirror image of a merchandise trade deficit is a capital import surplus. When the U.S. investment climate improves - through such policies as reducing the tax rate on capital gains - global investment dollars flow into the U.S. Foreigners in turn earn the dollars to pay...

For education and discussion only. Not for commercial use. The Commerce Department reported on March 14, 2006 that the 2005 current account deficit was $804.9 billion, up from $668.1 billion in 2004. The current account is the broadest measure of the U.S. trade balance. In addition to trade in goods and services, it includes income received from U.S. investments abroad less payments to foreigners on their investments in the United States. In the fourth quarter, the current account deficit was $224.9 billion, up from $185.4 billion in the third quarter. In the fourth quarter, the current account deficit exceeded 7...

The U.S. trade and investment deficit with the rest of the world ballooned to $805 billion last year, for the first time reflecting a spiral of rapidly growing debt service costs caused by rising interest rates. The surge in the external deficit, which is larger than any other nation's at 6.4 percent of economic output, comes as the United States is spurning foreign takeovers of ports and oil companies and raising doubts about its ability to keep financing such unprecedented levels of debt, analysts say. "It is certainly something to worry about," said Martin Feldstein, an economics professor at Harvard...

For education and discussion only. Not for commercial use. I am surprised at the recent outrage regarding the sale of American port operations to a United Arab Emirates' company, President Bush's proposal allowing foreign ownership of domestic airlines, etc. After all, we have enjoyed more than 25 years of continuous and growing trade deficits. And why not, if foreigners are willing to ship us more goods than we ship them, good for us as it enables us to consume more than we as a nation produce. Unfortunately, there is just one problem, the only reason foreigners would continue shipping us...

For education and discussion only. Not for commercial use. Finding a domestic tagline on merchandise is almost as hard to find as a diamond in the rough. With more and more textile and apparel industries racing overseas, the gem may soon even be extinct, possibly leaving some middle-class families to vie for lower-class jobs. Officials say that while WestPoint Home in Abbeville and Second Chance Body Armor in Geneva still survive, the plants could face the same hardships forcing Phillips Van Heusen, a 60-year-old textile plant operation in Ozark, to shut its doors permanently by May 15. Jodie Ayres, interim...

The U.S. Department of Commerce today reported that the international deficit in goods and services trade reached a record level of $726 billion in 2005, an 18% increase over 2004. The U.S. merchandise deficit alone, which excludes services, was $782 billion, also an 18% increase. The overall deficit increased $1 billion in December alone, to the third highest monthly level on record. The goods and services deficit as a share of U.S. gross domestic product (GDP) increased to an unprecedented 5.8% in 2005 (Figure A ). Rapid increases in the price of oil and related products were responsible for 63%...