Trade Activity Starts Strong in 2023

By SBE Council at 8 March, 2023, 1:05 pm

by Raymond J. Keating –

Trade kicked off 2023 strong, after it had ended 2022 poorly, according to the latest “U.S. International Trade in Goods and Services” report from the U.S. Bureau of Economic Analysis.

Let’s recall that trade has been an under-performing sector in an under-performing economy pre- and post-pandemic. That’s particularly the case with U.S. exports.

Real GDP data, for example, show that exports in 2022 not only were below their pre-pandemic 2019 levels, but below where real exports were in 2018 as well.

The second half of 2022 was a period of trade decline as well. December 2022 exports ($249 billion) were down from their August 2022 high ($262.3 billion) and came in at their lowest level since March 2022 ($243.9 billion). At the close of 2022, exports also had declined for four consecutive months.

As for imports, the December 2022 level ($316.2 billion) was down from its March 2022 high ($350.4 billion).

However, both real exports and imports were up nicely in January, with exports ($257.5 billion) up by 3.4 percent, and imports ($325.8 billion) rising by 3.0 percent.

Let’s hope that this growth continues throughout 2023 and beyond. Policymakers can make a positive contribution by turning away from protectionism or so-called managed trade, and instead, advance free trade policies, which are about reducing governmental barriers, such as tariffs and quotas, so that consumers, entrepreneurs, businesses – especially small firms – and workers can benefit from expanded choices and opportunities.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.