Imports surged in first quarter, depressing GDP growth.
Bloomberg reports that exports are tepid in relation to imports, especially after the West Coast port labor dispute ended.
The chart above is stark. Congressmen that represent districts with port cities often say – “we need free trade agreements to keep our ports busy.” And, they may continue, “addressing foreign mercantilism will harm the ports’ business.”
Simplistic and inaccurate thinking. Trade deficits mean that the ports are unloading ships, not reloading them for export, and the ships go back empty. In other words, our biggest export may be empty container ships.
If we fix foreign trade cheating, we will produce more here. If we produce more here, we’ll export more. We’ll be richer and trade will grow. Because economic growth correlates closely with trade growth. Trade deficits shrink economic growth and thus reduce trade. At the extreme, for example in 2008, recessions severely reduce trade.
We have increased trade with non-trade agreement countries somewhat more than with trade agreement countries.
Thus, port authorities and port cities should want balanced trade. They should want to load – not just unload – container ships.