A relatively small economic news item is worth noting given the amount of attention given by the president. In an article by the AP’s Martin Crutsinger entitled “US trade deficit surges in July to 12-year high,” the US trade deficit “surged in July to $63.6 billion, the highest levrl in 12 years…”
Per the article, “the Commerce department reported…the gap between what America buys and sells to foreigners, was 18.9% higher than the June deficit of $53.5 billion. It was the largest monthly deficit since July 2008 during the 2007 – 2009 recession.” The increase was “driven by a record 10.9% increase in imports” with a corresponding “8.1%” fall in exports.
Let that sink in. We are living in unique times with the pandemic. But, the whole world is exposed, not just the US. There are two points to be made.
First, the president has placed tariffs on major trading partners, who responded in kind. As economists have long noted, no one wins a trade war. Buyers just find less costly sources.
Second, America has so woefully handled the COVID-19 pandemic, the world is aghast. With around 4% of the world’s population, the US has around 22% of the global COVID-19 deaths. And, sadly the deaths continue. This truism runs in direct contrast to what the president touted at the RNC.
With other countries less impacted than we are, they can get closer to normal than we can. But, our folks can still buy from home. So, these numbers are not a surprise. As with any issue, the only way to solve a problem is to admit it exists.