MAPI Report: U.S. Deficit on Track to Increase by $50 Billion

Estimated deficit in U.S. manufactures could mean loss of 350K jobs.

The surge in the U.S. trade deficit in manufactures in the third quarter of 2014 and the increase in the Chinese trade surplus shows the countries continued their opposite growth paths, according to an analysis from the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation (MAPI).

In the report, Ernest Preeg, MAPI senior adviser for international trade and finance, notes that U.S. manufactured exports grew by 5 percent to $299.4 billion in the third quarter compared with 2013. The U.S. deficit in manufactures rose by $13 billion, or 9 percent, compared with the second quarter of 2013. This followed a 19 percent increase in the deficit in the second quarter.

Conversely, Chinese exports were up 13 percent to $606.2 billion in the third quarter. Its trade surplus increased by $52 billion, or 23 percent, in the third quarter over 2013, following a 9 percent increase in the second quarter.

“The five-year increase in the deficit of $250 billion since 2009 results in the loss of about 1.7 million jobs, or 15 percent of the sectoral labor force,” Preeg wrote. "By sector, Chinese information technology exports of $200 billion in the third quarter were almost four times larger than the $55 billion of U.S. exports, and growing faster, which explains the Chinese interest in a WTO IT agreement."

Preeg estimates a potential increase to $50 billion in the U.S. deficit this year in manufactures, which would mean a net loss of approximately 350,000 jobs in the American manufacturing sector.

"A U.S. trade strategy to reverse this serious decline in U.S. export competitiveness for the technology-intensive manufacturing sector needs to combine trade and exchange rate policies, with exchange rate policy far more important In the case of China," Preeg wrote.

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access