PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Troubling Trends Seen in Latest Trade Data

By at 7 February, 2019, 12:38 pm

by Raymond J. Keating-

As federal agencies serving up data on the economy work to catch up after the partial government shutdown, the U.S. Bureau of Economic Analysis released its report on November trade numbers on February 6. The data told a troubling story in terms of both exports and imports.

Exports fell in November, after a decline in October as well. In general, exports have been sliding down since May. In May 2018, exports came in at $213.6 billion (seasonally adjusted data) with November’s registering $209.9 billion.

Meanwhile, imports took a dive in November, falling from $266.9 billion to $259.2 billion. That was the lowest monthly level since June 2018.

Clearly, a trade agenda emphasizing increased tariffs and threats of higher trade barriers, and the predictable responses by trading partners, are working against other positive economic policy measures – namely, tax and regulatory relief from the first two years of the Trump administration – and against economic growth.

Declining or stagnating exports mean fewer opportunities for small businesses and their workers, and the same goes for falling imports. Also, keep in mind that at least 55 percent of U.S. imports are inputs – that is, intermediate or capital goods – for U.S. businesses.

For decades, the United States led the world in the process of reducing governmental barriers to trade, and those efforts have benefited entrepreneurs, businesses, workers and consumers in the U.S. and among our trading partners. It has led to greater growth at home and abroad.

The U.S. needs to turn away from its recent protectionist trade policies, and once again, reclaim the mantle of leadership in advancing freer trade.

See SBE Council’s 2019 Policy Agenda for Entrepreneurs and Small Business, which includes a “Growth via Global Markets and Strengthening IP” section.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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