The Enormous, Humongous Trade Deficit Got Bigger in 2016, Action Needed

Dave Johnson

Dave Johnson Fellow, Campaign for America's Future

The United States ran the most enormous, humongous trade deficit last year since 2012. The gap between our exports and imports widened by 0.4 percent to $502.3 billion in 2016, the Census Bureau reported today. The government also found that the trade deficit amounted to $44.3 billion in December, down $1.5 billion from a revised $45.7 billion in November.

The goods deficit with China alone hit $30.2 billion in December, up $1.8 billion from the previous month.

The shocking trade deficit our country ran last year includes the services surplus. What happens if we separate services from goods? Exports of services decreased $1.3 billion to $749.6 billion in 2016. Imports of services increased $13.1 billion to $501.8 billion in 2016. Services ran a surplus of $247.8 billion. Exports of goods decreased $50.5 billion to $1,459.8 billion in 2016. Imports of goods decreased $63.0 billion to $2,209.9 billion in 2016. The resulting goods trade deficit was $749.4 billion. This is an enormous, humongous number. (Reports of this number will vary, due to “seasonal adjustments” and rounding. It is reported here as $734.3 billion, still an enormous, humongous number.)

What this means is in 2016 we moved $749.4 billion (or $734.3B) worth of jobs making, mining and growing things out of the country. And that included a third-quarter surge in soybean exports.

The trade deficit is really about moving production out of the United States to cut costs for American corporations. Close a factory and lay off the workers here, buy the goods from a factory there that pays squat and doesn’t protect the environment, pocket the difference. In particular, we’re talking about moving production to China since 2001, as Leo Gerard and I have recently explained.

It Doesn’t Have to Be This Way

A trade deficit can be a good thing if it’s temporary and if the deficit is used for things that help our economy, like productive investment at home. For example, if a company is moving production to China but reinvesting the savings to improve domestic facilities and educate and employ the people whose jobs were exported it can benefit everyone in the longer term. But that’s not how our companies are using outsourcing. They’re using it to put cash into the pockets of the “investor class” and put wage pressure on the rest of us. They’re exporting our manufacturing ecosystem without reinvesting in improved domestic industrial capacity. This is literally selling the farm. And this has been going on for a very long time.

Individual companies have an incentive to do these things. But if all the companies do these things the country as a whole is drained of its industrial capacity, wealth, jobs, wages and the ability to make a living. This is why government has to step in and provide incentives and regulations that make sure the playing field is working for all of us instead of just a few of us. We need tax policies that reward domestic investment and regulations that prevent investors from “selling the farm” for their own short term profit. The nation’s “industrial capacity” farm is what feeds us, so it’s not really their farm to sell, it’s ours.


Reposted from Our Future.

Johnson also is a fellow at the Commonwealth Institute and a Senior Fellow at the Institute for the Renewal of the California Dream. Follow Dave Johnson on Twitter:

Posted In: Allied Approaches, From Campaign for America's Future

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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