U.S. Trade Deficits
September 19, 2007
The U.S. consistently ran Trade Surpluses from 1960 to 1970, but after 1970 has incurred Trade Deficits in every year except 1973 and 1975. The following two charts show the aggregate ‘Goods Only’ Trade Deficit by Decade for the Decades ended 1979, 1989, 1999, and 2009, where we have assumed that the Trade Deficit for 2006 will be repeated in each of 2007 through 2009 when the Trade Deficit has increased on a year over year basis in every year after 2001. Based on current monthly trade deficit levels we believe it likely, barring a serious recession, that the Trade Deficit we have interpolated for the Decade ended 2009 will be greater than the amount we have calculated (Data – Balance of Payment basis: U.S. Census Bureau, Foreign Trade Division).
FusionCharts.
FusionCharts.
The first chart suggests that the cumulative U.S. Trade Deficit for the ten year period ended 2009 will be approximately $6.7 trillion. The actual cumulative Trade Deficit (‘Goods Only’) for the 7 years ended 2006 was $4.2 trillion, in circumstances where the comparative Trade Deficits for the 10 year periods ended 1979, 1989, and 1999 were $106 billion, $941 billion, and $1.7 trillion respectively. For the period 1971 – 2006 the cumulative U.S. Trade Deficit (‘Goods Only’) was $7.0 trillion, 60% of which was attributable to the 7 year period ended 2006. The second chart shows the U.S. Trade Deficit (‘Goods Only’) for each of the years 2000 – 2006. Importantly, aside from being reflective of the change that has occurred and is occurring within America’s economic infrastructure, the Trade Deficits have resulted in significant offshore holdings of U.S. Dollars and the $ being vulnerable to external forces beyond America’s control.
In January, 2007 we conducted surveys in both the U.S. and Canada. One of the questions we asked was “What do you think is the current cumulative U.S. trade deficit?” The results, derived from respondents with more than $100,000 invested in publicly traded securities, were:
| $2 trillion | $4 trillion | $6 trillion | Don’t Know | Other | |
| Americans | 16% | 28% | 35% | 20% | 1% |
| Canadians | 8% | 18% | 41% | 30% | 3% |
Given that the correct answer at the time the question was asked was either $7 trillion, or $5.7 trillion if U.S. ‘Service Surpluses’ are deducted from the ‘Goods Only’ Deficits our surveys suggest that respondents in each country knew more about the cumulative U.S. Trade Deficits than one might have thought, but even so the majority were unaware of the extent of them.
We also asked the question “How concerned are you with the current U.S. Trade Deficits?” The results were:
| Not at All | Somewhat | Concerned | Very | Other | |
| Americans | 8% | 26% | 33% | 33% | 0% |
| Canadians | 17% | 18% | 30% | 33% | 2% |
We believe the U.S. Trade Deficits, in combination with the concurrent loss of U.S. manufacturing jobs (particularly after the year 2000), the current cumulative U.S. National Debt, and other related issues (see later posts that will be made over the next few weeks on this Blog) speaks volumes with respect to America’s prospective role over the next several years as the world’s leading economic power. Readers are invited to comment on their concerns or lack thereof with regard to the current and growing U.S. Trade Deficits. Comments dealing with reader’s specific concerns, and that link those concerns to other current and prospective economic conditions will be of particular interest. Reader comments as to the ways in which they may think the cumulative and ongoing U.S. Trade Deficits can be viewed positively in an American context likewise will be of particular interest.
September 22nd, 2007 at 2:24 pm
This trade deficit information is very interesting and I think that if you could indicate on the bars, how much they are paying annually or by decade for imported energy (oil, gas, and electrical power (from Quebec)), it would add to the perspective and stimulate additional commentary.
September 25th, 2007 at 8:59 pm
Thanks very much for your thoughtful comment. To date we have been unable to track down the statistics you suggested. If we succeed in finding them we will repost.