Today’s report on the August trade numbers should serve as a wakeup call to policymakers in Washington as to the benefits of lowering trade barriers abroad for U.S. exporters. The Commerce Department’s August International Trade report shows our trade deficit increased by $3.7 billion bringing our total to $46.3 billion. These numbers do cause us to view the report with some concern as they show exports of goods were unchanged from July and imports of goods rose by $3.8 billion.
The stalling of exports of goods is mainly due to a $1.7 billion drop in exports of civilian aircraft (which are extremely volatile from month to month). We are now just over a year into recovery and so far in 2010 we had been seeing large growth in exported goods — manufacturing exports were up 20.7 percent in the 12 months ending in August. This has been good news because by comparison to the prior recovery this pace of export growth was not attained. Strong export growth has been one of the main reasons why the manufacturing sector has led the recovery to date and we were hoping to see stronger growth for August. And while it appears that the domestic economy has decelerated in recent months, that fact that exports have been a source of growth shows the importance of selling to markets abroad.
Given that exports remain unchanged from July to August, yet imports increased, reminds us how critical it is to reducing trade barriers and taking the steps outlined in the NAM’s “Blueprint to Double Exports in Five Years” to help meet the goal of the President’s National Export Initiative. Further, dozens of free trade agreements are currently being negotiated around the world while the U.S. sits on the sidelines. If we don’t see any movement on our agreements with other countries, these numbers could become very alarming in the future.