The following is a summary of a new report written by Ernest Preeg and released by the Manufacturers Alliance for Productivity and Innovation (MAPI).
–The U.S. trade deficit in manufactures rose $13 billion in the third quarter from 2013, and is headed toward a $50 billion increase for the year, which equates to a net loss of about 350,000 American manufacturing jobs;
–The Chinese surplus in manufactures rose by $52 billion in the third quarter, headed toward $100 billion for the year, indicating a mercantilist export-led growth strategy, with 13% export growth double GDP growth;
–For the first time, Chinese exports in the third quarter of $606 billion doubled U.S. exports of $299 billion, a dramatic change from 2000 when U.S. exports were three times larger than Chinese exports;
–By sector, Chinese IT exports of $200 billion were almost four times larger than the $55 billion of U.S. exports, and growing faster, which explains Chinese interest in a WTO Information Technology Agreement;
–Bilaterally, the U.S. third quarter deficit with China of $108 billion was 70% of the global deficit, while the $12 billion bilateral increase from 2013 was 94% of the global increase;
–In contrast, the second largest deficit with Japan of $20 billion was only one-fifth the deficit with China, and it declined by $1.7 billion from 2013;
–A U.S. trade strategy to reverse the serious decline in U.S. export competitiveness for the technology-intensive manufacturing sector needs to combine trade and exchange rate policies, with exchange rate policy for price-sensitive manufactures far more important in the case of China.
The complete report can be found here.