Trade Down For All of 2015 For First Time Since the Recession
By SBE Council at 6 February, 2016, 1:42 pm
by Raymond J. Keating-
With the U.S. Bureau of Economic Analysis release of December’s trade data, the bad news on trade for 2015 was confirmed.
U.S. exports for all of 2015 declined versus 2014. That was the first annual decline in exports since 2009, in the depths of the recent recession. Looking at data since 1992, exports dropped in 2001 and 2002, again around the 2001 recession, and had a small decline in 1998.
In terms of monthly data, December exports fell for the third straight month, registering the lowest level since January 2012.
Meanwhile, imports for 2015 declined as well. That was the first drop also since 2009, with the only other decline coming in 2001.
As for the monthly data, December imports actually inched up versus November, after declining in the previous three straight months.
Falling exports mean less business and fewer international opportunities for entrepreneurs, businesses and workers. The same basically goes for declining imports, along with reflecting reflecting a poor domestic economy.
This is bad news for the general economy and for the small businesses that are major players in international markets. Consider, for example, that as noted by the U.S. Census Bureau, small and mid-size businesses in the international trade arena in 2013 made up 97.7 percent of exporters, 97.1 percent of importers, and 94.4 percent of firms that both export and import.
What’s needed? The U.S. must re-establish itself as a global leader in terms of pro-growth economics. That is, the U.S. needs to spur domestic growth by implementing, for example, substantive, permanent, broadbased tax and regulatory relief, and need to aggressively pursue and achieve free trade agreements – starting with the Trans-Pacific Partnership trade deal – that reduce governmental barriers to international trade.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.