Exports Continued to Decline in April

By SBE Council at 7 June, 2023, 1:33 pm

by Raymond J. Keating –

International trade is vital to U.S. economic growth and to small businesses. Nonetheless, the Administration seems content to either ignore trade or – and this is much worse – advance and/or maintain protectionist policies that undermine the economy, small businesses, and American workers and consumers.

As SBE Council has pointed out before, exports effectively measure sales and opportunities for U.S. businesses and workers in the global marketplace, while imports measure inputs of U.S. domestic businesses, from manufacturers to retailers. When government raises costs via tariffs and quotas, for example, these are clear negatives for consumers; for the small businesses that overwhelmingly populate the universe of exporters and importers, and nearly all industries affected by exports and imports; and for the U.S. economy.

If you doubt the importance of trade to our economy, note that real total trade, i.e., real exports plus real imports, registered 7.6 percent of real U.S. GDP in 1960, and that grew to 32.1 percent in 2022.

Moving in the Wrong Direction

As for the latest monthly data from the U.S. Bureau of Economic Analysis, since August of last year, monthly exports have declined, or at best, stagnated – coming in at $261.6 billion in August 2022 versus the most recent tally of $249 billion in April 2023. That April amount was the lowest since March 2022, not accounting for inflation.

Meanwhile, imports in April 2023 registered $323.6 billion. That compared to $339.4 billion in June 2022.

It’s vital for U.S. and global economic growth that the U.S. re-establish itself as a leader for reducing governmental barriers and costs that inhibit trade, that is, once again, leading the charge for expanded opportunities via free trade.

Post-World War II, and particularly since the early 1960s, the U.S. did, in fact, lead the world away from protectionism and toward greater freedom on the trade front. That is, until more recent times, when during most of the Obama administration, the U.S. moved to the trade sidelines, and then during the Trump and Biden administrations, the U.S. became more overtly protectionist.

This dangerous protectionist foray must be reversed. It’s time to, once again, take heed of what President John F. Kennedy said when signing the 1962 Trade Expansion Act: “This act recognizes, fully and completely, that we cannot protect our economy by stagnating behind tariff walls, but that the best protection possible is a mutual lowering of tariff barriers among friendly nations so that all may benefit from a free flow of goods.”

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist and The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist.