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America's Trade Defecit - 5/18/15

America sustained a massive trade deficit in March.  Earlier this month, the Commerce Department reported that the nation’s trade deficit rose to fifty one point four billion dollars in March, the largest monthly deficit in six and a half years.  March’s trade deficit was forty three percent greater than February’s trade gap of roughly thirty six billion dollars. 

As indicated by writer Patricia Cohen among others, much of the increase was attributable to the settling of labor disputes at West Coast ports.  That allowed a backlog of imported shipments to flood into the U.S., which translated into a boom in imports.  Imports to the U.S. expanded by nearly eight percent in March over February, with imported cell phones, clothing, automobiles, furniture and computers all arriving in large quantities and eventually ending up in stores and homes. 

By contrast, U.S. exports expanded by less than a percentage point in March.  Imports from China expanded by nearly a third in March.  America’s trade deficit with Japan grew by two billion dollars to six point three billion dollars, the largest in two years.  It is very likely that the monthly trade deficit will fall significantly going forward, but a still strong U.S. dollar suggests that U.S. export values will continue to fall well short of imports.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.