February Trade Data: Struggles Continue

By at 8 April, 2021, 12:01 pm

by Raymond J. Keating-

Even as the economy improved during the first quarter of this year, trade did continue to struggle in February, according to the latest data from the U.S. Bureau of Economic Analysis.

After suffering steep declines in both exports and imports during February to May of last year, a recovery subsequently began in June and ran through January of this year.

However, exports took a notable move down in February, with imports also declining but to a smaller degree.

Source: Federal Reserve Bank of St. Louis, FRED

Source: Federal Reserve Bank of St. Louis, FRED

As noted in the above two charts, U.S. trade has badly underperformed since 2008, most recently suffering since the latter part of 2018.

It’s no mere coincidence that for the past dozen-plus years, U.S. leadership in advancing free trade has evaporated. The U.S. largely moved to the trade policy sidelines during the Obama administration and then shifted to a protectionist mode during the Trump administration. That has meant no substantive movement in terms of reducing government barriers – such as tariffs and quotas – to trade, while assorted tariffs have been increased.

Trade matters to the U.S. economy, to U.S. small businesses (with 91.4 percent of U.S. exporters having fewer than 100 employees in 2019, for example, based on the latest Census Bureau data), to U.S. workers, and to U.S. consumers.

Early on, the Biden administration has pointed policy in the wrong direction in key areas, that is, taxes, regulations and government spending. The Administration has recently signaled it will keep some of the tariffs imposed during President Trump’s term. Let’s hope that since President Biden has been around Washington for a very long time, he recalls that there once was a time when elected officials on both sides of the aisle supported expanding opportunity through freer trade. That kind of bipartisanship is needed once again.

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


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