IWS Documented News INTERNATIONAL

IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________

 

Congressional Research Service (CRS)

 

U.S. International Trade: Trends and Forecasts

Dick K. Nanto, Specialist in Industry and Trade

J. Michael Donnelly, Information Research Specialist

September 6, 2011

http://fpc.state.gov/documents/organization/174192.pdf

[full-text, 42 pages]

 

Summary

The global financial crisis, now officially dated to the 19 months from December 2007 through

June 2009, caused the U.S. trade deficit to decrease from August 2008 through May 2009, but

since then it has begun to increase again as recovery has slowly progressed. The financial crisis

caused U.S. imports to drop faster than U.S. exports, but that has been reversed as U.S. demand

for imports have recovered.

 

In 2010, the trade deficit in goods reached $645.9 billion on a balance of payments (BoP) basis,

more than the $505.9 billion in 2009, but less than the $830.1 billion in 2008. The 2010 deficit on

merchandise trade (Census basis) with China was $273 billion, with the European Union (EU27)

was $79.7 billion, with Canada was $28.5 billion, with Japan was $60.1 billion, and with Mexico

was $66.4 billion. With the Asian Newly Industrialized Countries (Hong Kong, South Korea,

Singapore, and Taiwan), the trade balance moved from a deficit of $5.5 billion in 2007 to

surpluses of $2.2 billion in 2008, $3.5 billion in 2009, and $14.0 billion in 2010. Total Imports of

goods of $1,934.5 billion increased by $359.2 billion, 22.8% over 2009. Exports of goods of

$1,288.7 billion increased by $219.2 billion or 22.5%. The overall merchandise trade deficit for

2010 increased, or became more negative, by $131 billion or 27.7% over 2009.

 

Despite increasing debts, in 2010, the United States ran a surplus of $165 billion in investment

income with the rest of the world. With China, however, there was a deficit of $35 billion and

with Japan $33 billion. In automotive trade, the U.S. ran deficits of $44 billion with Japan, $37

billion with Mexico, $18 billion with Germany, and $11 billion with South Korea. In energy

trade, the U.S. deficit in 2010 of $273 billion was 26% greater than the $217 billion in 2009, but

less than the $415 deficit in 2008. We examine in detail: high technology trade; energy trade and

the crude oil deficit and sources; and transportation trade.

 

Trade deficits are a concern for Congress because they may generate trade friction and pressures

for the government to do more to open foreign markets, to shield U.S. producers from foreign

competition, or to assist U.S. industries to become more competitive. Overall U.S. trade deficits

reflect excess spending (a shortage of savings) in the domestic economy and a reliance on capital

imports to finance that shortfall. Capital inflows serve to offset the outflow of dollars used to pay

for imports. Movements in the exchange rate help to balance trade. A rising trade deficit (when

not matched by capital inflows) places downward pressure on the value of the dollar, which, in

turn, helps to shrink the deficit by making U.S. exports cheaper and imports more expensive.

Central banks in countries such as China, however, have intervened in foreign exchange markets

to keep the value of their currencies from rising too fast.

 

The balance on current account includes merchandise trade plus trade in services and unilateral

transfers. In 2010, the deficit on current account grew to $470.9 billion from $376.6 billion in

2009 and from $677.1 billion in 2008. IHS Global Insight forecasts a higher deficit on current

account for 2011, at $443.7 billion, and remaining near $400 billion through 2016.

 

The trade agenda of the 112th Congress centers on three Free Trade Agreements awaiting

congressional action and trade with China. Selected Legislation: S. 380, S. 433/H.R. 913, S. 308,

S. 328/H.R. 639, H.R. 1655, H.R. 29, H.R. 516, H.R. 554, H.R. 833, S. 98, S. 708.

 

Contents

Most Recent Developments ............................................................................................................. 1

Trade in Goods .......................................................................................................................... 2

Trade in Services ....................................................................................................................... 2

Trade in Goods and Services ..................................................................................................... 3

International Trade and U.S. Trade Policy....................................................................................... 4

The Trade Deficit and the Dollar ..................................................................................................... 8

Types of Trade Data....................................................................................................................... 12

U.S. Merchandise Trade Balance................................................................................................... 13

Current Account Balance............................................................................................................... 16

Forecasts ........................................................................................................................................ 19

U.S. Trade with Selected Nations .................................................................................................. 20

U.S. Current Account Balances with Selected Nations in 2009 and 2010..................................... 24

Advanced Technology, Transportation, and Energy ...................................................................... 27

High Technology Trade ........................................................................................................... 27

Motor Vehicle Trade ................................................................................................................ 29

Energy Trade ........................................................................................................................... 30

Some Common Perceptions........................................................................................................... 33

Is Trade with China Merely Replacing That with Southeast Asia? ......................................... 33

Trade Balances with Free Trade Agreement Nations .............................................................. 36

International Trade Statistics Web Resources ................................................................................ 37

 

Figures

Figure 1. Monthly U.S. Balances of Trade in Goods and Services, 2007-2011 .............................. 4

Figure 2. Month-End Trade-Weighted U.S. Dollar Against Broad, Major Currencies, and

Other Important Trading Partner Indices, January 2000-March 2011........................................ 10

Figure 3. The Exchange Value of the U.S. Dollar Compared with the Chinese Renminbi,

Japanese Yen, EU Euro, and South Korean Won........................................................................ 11

Figure 4. U.S. Merchandise Exports, Imports, and Trade Balance................................................ 13

Figure 5. Annual Growth in U.S. Merchandise Exports and Imports, 1982-2010......................... 16

Figure 6. U.S. Current Account and Merchandise Trade Balances................................................ 17

Figure 7. U.S. Merchandise Trade Balances With Selected Nations, 2010 ................................... 20

Figure 8. U.S. Trade in High Technology Products ....................................................................... 28

Figure 9. 2010 U.S. Automotive Trade by Major Segment ........................................................... 30

Figure 10. U.S. Trade Balance, Energy Balance, and No-Energy Balance ................................... 31

Figure 11. U.S. Balance of Merchandise Trade with FTA Partners in 2009 and 2010 .................. 37

________________________________________________________________________

This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

****************************************
Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
Cornell/ILR School                        
16 E. 34th Street, 4th Floor             
New York, NY 10016                        
                                   
Telephone: (607) 262-6041               
Fax: (607) 255-9641                       
E-mail: smb6@cornell.edu                  
****************************************