U.S. Trade and China
June 10, 2009
The $29.16 billion deficit in April generated trade in goods and services was close to expectations and compares with a first-quarter average gap of $30.4 billion but a mean deficit of $61.2 billion in the first four months of 2008.
The U.S. merchandise trade deficit on a census basis amounted to $144.0 billion in January-April, $118.5 billion or 45.2% smaller than a year earlier. Commerce with China, the strongest world economy and one being counted upon to boost others, accounted for merely 7.0% of the on-year drop in the U.S. trade shortfall. As a result, China’s share of the total U.S. deficit widened to 46.6%. OPEC and the Western Hemisphere were respectively responsible for 39.7% and 34.5% of the improvement in U.S. trade from January-April 2008 to a year later, while Europe and other Pacific Rim nations accounted for 11.3% and 12.8% of the deficit’s decrease.
Current account disparities were a root cause of financial market abuses and the global recession. Both the Chinese surplus and U.S. deficit must drop substantially and on a sustainable basis if the world economy is to avoid returning to the disastrous conditions of the past year.
Copyright 2009 Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese Yuan, Dollar
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