President Trump announced a new executive order aimed at pushing forward his trade agenda. Targeting the US trade deficit, the order directs the Commerce Department and the US Trade Representative to lead an interagency investigation and produce a “comprehensive report” on the causes of the US trade deficit. They are to do so by looking at specific industries and trade policies by foreign countries that contribute to the continuing gap between US exports and imports.
According to the US Census data on trade, the US ran about a $500 billion net trade deficit in Goods and Services with the rest of the world in 2016. The US runs a larger deficit when looking only at Goods (such as manufactures, agriculture, etc.), at $750 billion, while the county runs a surplus of about $250 billion in Services (such as business services, finance, information technology, etc.). Broken down by country, the largest Goods deficits are with China (over $54 billion in the first two months of 2017) and Mexico, as well as Saudi Arabia (petroleum imports) and the European Union. In Services, it is noteworthy that the US runs sizable surpluses with all of these same countries. (Data from US Census)Continue reading →
Professor Michael R. Czinkota of Marketing and International Business Faculty at Georgetown University and Paul Freedenberg, who has served as Under Secretary of Commerce, heading the Bureau of Export Administration in the U.S. Department of Commerce, during the Reagan administration discuss what will the risks and rewards balance in the long run for U.S. economy in an Interview with TheHill.com.
Multinational companies in particular are concerned that the ECR, which has taken the better part of four years and is still not completed, has diverted the Obama Administration’s attention from the equally important task of simplifying and expediting the licensing process for sales to China and other difficult destinations. They are also concerned that other important tasks such as reforming encryption controls, creating an effective way to authorize inter-company exchange of data on a worldwide basis, and increasing the utility of the UK and Australia arms treaties, have been deferred.
2014 will be the acid test of the ECR initiative. Beginning on October 15, when the first of the new regulations go into effect, exporters planning to export high technology will begin to switch to the new regulations, create new compliance programs, and re-categorize almost all of their inventories. We shall see whether the ECR lives up to the Administration’s promises of actually enhancing national security while providing export control efficiency and simplicity, and whether the Obama Administration can point to the new licensing system as an accomplishment that is worth all the work that has been put into it.
According to the latest reports,released on July 12, 2011, the U.S. Trade Deficit has increased greatly from April to May due in part to the rising oil costs. The U.S. Department of Commerce states that the good and services deficit increased from $43.6 billion to $50.2 billion over that month. Click here to read the press release in its entirety.
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