Growing U.S. Trade Deficit Brings On Economic Concerns

The trade imbalances between the U.S. and China in manufactured goods and underlying structural changes in trade unfavorable to U.S. export competitiveness, raise broader questions about the economic impact, according to a new Manufacturers Alliance/MAPI report.

The U.S. global trade deficit in manufactures rose by 21% to $213 billion in the first half of 2011, compared with 2010, while the Chinese surplus soared by 27% to $280 billion, Industry Week reported. These trade imbalances are back to the excessively high pre-recession levels of 2008, notes Ernest H. Preeg, MAPI Senior Advisor for International Trade and Finance.

Preeg points out that manufactured goods constitute the dominant sector of trade, accounting for 95% of Chinese and 80% of U.S. merchandise exports (see chart above). ◆