Trade Deficit for June 2011 - $53.1 Billion

The June 2011 U.S. trade deficit increased $2.3 billion to -$53.1 billion. This is a 4.4% monthly increase in the trade deficit. Both imports and exports decreased, showing a slowing of global trade. The trade deficit wasn't this big since October 2008. Exports decreased -$4.1 billion, or -2.34% from last month while imports decreased -$1.9 billion, or 0.83%.


Reactions to the S&P Downgrade of USA Sovereign Debt

china flagChina is having a field day blasting the United States over S&P's downgrade:

The White House on Saturday challenged the ruling by Standard & Poor's to downgrade U.S. long- term credit rating form top rank of AAA to AA+, citing the agency' s decision relied on faulty math and in haste.

Disappointingly, instead of reflecting on themselves and sitting down to fix problems in a cooperated way, the Democrats and Republicans in Washington are questioning the creditability of the downgrade ruling and blaming each other for the ever-first shame of slipping out top credit rating club.

The alarm has rung. It is time for the naughty boys in Washington to stop chicken games before they cause more damages. It is time for the policy-makers in Washington to settle down, to show some sense of responsibility and fix their fiscal problems.

China Trade Surplus $22.3 billion in June

China's trade surplus ballooned:

Exports hit a record high of $162 billion in June, while imports for the month were $139.7 billion. That left the country with a trade surplus of $22.3 billion in June, compared with $13.1 billion in May.

What is more frightening is how Reuters words their report. Because China once again dominates trade with exports, Reuters tries to claim their economy is softening. This is because China's imports were way below expectations, but imports do not imply weak China domestic consumer demand. Why? Unlike the U.S., Consumer spending is only about 35% of China's GDP. They save and invest, not spend money buying imports.

Therefore, a slowing of imports does not mean China's economy is slowing as it would the United States, if anyone bothered to read the basic GDP equation. China's GDP was 9.7% in Q1 2011.

Trade Deficit for April 2011 - $43.7 Billion

The April 2011 U.S. trade deficit decreased -$3.1 billion to $43.7 billion. This is a -6.7% monthly drop in the trade deficit and the largest since October 2010. Exports were the highest on record. Oil imports were the highest on record and the drop in imports from Japan also was the largest decrease on record. The tsunami hit Japan on March 11th.


Trade Deficit for February 2011 - $45.8 Billion

The February 2011 U.S. trade deficit decreased $1.2 billion to $45.8 billion. The January 2011 monthly trade deficit was $47 billion, revised up from $46.3 billion. $26.7 billion of this deficit is oil related, $0.9 billion less than 1 month ago, and 44.1% of the total goods trade deficit. Both imports and exports dropped, with imports declining $3.6 billion, or 1.7% and exports dropping $2.4 billion, or 1.4% for February.

Trade Deficit for January 2011 - $46.3 Billion

The January 2011 U.S. trade deficit increased a whopping $6 billion to $46.3 billion, from the December 2010 trade deficit of $40.3 billion, revised. $26.7 billion of this deficit is oil related, $1.2 billion more than 1 month ago, and 45.3% of the total goods trade deficit. Imports increased 2.4 times faster than exports than December, with monthly increases of $4.4 billion for exports and imports $$10.5 billion.


China Trade Surplus for January 2011

The headlines blare China's trade deficit shrunk, yet what does that mean for the United States and it's massive deficit with China?

Imports jumped 51% from the year-ago period, while exports grew by 37.7%, according to reports citing official data released over state television Monday.

While reports show China's trade surplus was cut by half, from $13.1 billion to $6.5 billion, unless those imports come from the United States, a 37.7% China export increase from a year ago is not good news for America.

The United States is China's biggest export destination, so odds are those exports are coming here. Notice China reports only two way trade, but most of the trade with the U.S. is one way and that is China exporting to America.

More of the rise in imports is due to increasing commodity prices:

he average price of imported iron ore was more than US$151 per ton, rising 66 percent year-on-year, while bean prices rose 20.4 percent.

The China State Press has a different take and notes China's trade activity has surged 44% from one year ago.

The European Union remained China's largest trade partner in 2010, with EU-China trade up 30.5 percent year on year to 45.97 billion U.S. dollars.

Trade Deficit for December 2010 - $40.6 Billion

The December 2010 U.S. trade deficit increased $2.3 billion to $40.6 billion. $25.3 billion of this deficit is oil related. For the year, the trade deficit is -$497.8 billion, a trade deficit increase of -$122.9 billion, or 32.8% increase, in comparison to 2009. Oil related trade was -$265 billion of the total yearly 2010 deficit, or 53.2%.

About That GM China Sales Report

The headlines are blaring how GM sold more cars in China, a first for the corporation, than the United States. Their sales in China alone are up 28.8% from a year ago.

GM's sales in China rose 28.8% last year to 2,351,610 vehicles, GM said Monday. U.S. sales rose just 6.3% to 2,215,227

Unfortunately the financial press then tries to tie those sales to mean more U.S. jobs. That is simply not the case.

The company said the expansion will generate 750 jobs for the Flint plant, which makes Chevrolet Silverado and GMC Sierra pickups and has been operating on two shifts per day. The last time the plant worked around the clock was in the second quarter of 2008.

GM will fill the shift by recalling laid off workers who will start arriving in the second quarter. It expects to hire no new employees.

The Flint factory employs about 2,100 hourly and salaried workers. It made 115,000 trucks last year.

Last year, GM sold 8.39 million autos. Toyota is still #1 with 8.42 million car sales.

What the press and GM are not telling you is that sales in China are extensively through Joint Ventures. A joint venture means a Chinese company is partnering with GM, but they have their own plants, their own factories, their own manufacturing and their own workers.

As an example of the media spin, recently an export deal to China of $400 million in vehicle exports and $500 million in components over two years was announced.

What they are not telling you is this very JV, or Chinese company, made & sold 1.03 million of the 2.35 million GM cars sold in China.