|
|
The U.S. trade gap grew to $109.8 billion in March, a 22.8-percent jump from February, as Americans grabbed more cars, clothing, and computers and industry bought more supplies, the U.S. commerce department reported.
Before the COVID virus arrived, the monthly deficit typically ranged between $40 billion and $50 billion, The Wall Street Journal noted.
Imports totaled $351.5 billion, up 10.2 percent. Exports grew by 5.6 percent as the country shipped more industrial goods and welcomed more foreign visitors, revenue from which is counted among exports.
The U.S. imported the most petroleum since December 2014, following president Joe Biden’s ban on Russian oil, although Russia’s petroleum had supplied no more than 5 percent of American oil imports.
The Ukraine war, Western sanctions, and China’s widespread lockdowns to fight the COVID virus paint a gloomy picture for the trade imbalance in April and May, especially if Americans keep buying at a zesty pace, the Journal noted.
“It’s that story of robust economic demand at home versus a weak backdrop abroad,” U.S. economist Mahir Rasheed at Oxford Economics told the WSJ.
The trade chasm will remain wide in the months ahead, he predicted, although high prices might combine with the U.S. Federal Reserve’s higher interest rates to cool consumers’ enthusiasm for buying.
PUBLISHER’S NOTE: Americans blame politicians or foreign countries for inflation but ignore their own responsibility: constant spending on non-essentials drives inflation.
TREND FORECAST: We emphasize what we forecast in “U.S. Loses Trade War: February Trade Deficit Near Record” (12 Apr 2022): The U.S. trade deficit will continue at or near a record clip not only while the Ukraine war remains unsettled, but long after.
As we noted in “Trade Deficit USA: “We’re No. 1!” (11 Jan 2022), until America becomes more of a self-sustaining economy and brings more manufacturing back home, the trade deficit will continue to increase as long as Americans insist on buying the newest smartphone, a television for every room, and the latest $150 sport shoe.
If inflation has a silver lining, it might be that higher prices will force Americans to rediscover thrift as a virtue. We saw consumer spending beginning to bend in this direction in March, which we reported in “Highest Inflation in 40 Years Curbs Consumer Spending” (5 Apr 2022).