As Americans Appetite for Foreign Goods Surges Back, the May Trade Deficit Soars Too

[NNN0LHI]

http://www.latimes.com/news/nationworld/nation/wire/sc-dc-0714-trade-deficit-20100713,0,3834246.story

BY DON LEE, Tribune Washington Bureau

July 13, 2010 | 2:42 p.m.

WASHINGTON – In a sign that Americans are persisting in the risky habit of buying more than they sell in the global economy, the U.S. trade deficit jumped unexpectedly in May to the highest level since November 2008.

That prompted some analysts to cut back their forecast of how much the economy would grow in the second quarter and to warn that the underlying imbalance posed a threat to the nation's long-term prosperity and economic strength.

"Definitely the weakness in trade through May suggests less momentum in the economy," said Shawn DuBravac, chief economist for the Consumer Electronics Assn. snip

Longer term, analysts worry that the U.S. seems to be returning to a pattern of buying more than it can afford with financing from overseas while export-powered economies such as China continue to rack up surpluses. Many economists blamed at least part of the 2008-2009 recession on such global economic imbalances. snip

But American purchases of foreign-made computers, cars and consumer goods increased considerably in May. The deficit with China, which had eased during the recession and early part of the recovery, is now rising again and was a major factor in the higher trade gap in May.

[dkf]

1. Do we have a choice? What do we produce here anyway?

[izquierdista]

2. Tanks, landmines, predator drones

If they start buying those for domestic use, I'm going to have to leave.

[virgogal]

3. + 1

[divideandconquer]

4. We run a huge deficiet in foreign cars and parts

These foreign car purchases are vanity purchases, very few are better than today's vastly improved domestically produced car

The Auto Deficit: Stuck In Neutral
A weaker dollar isn't an instant fix for U.S. carmakers' trade woes

Given the number of Japanese car plants that have opened in the U.S. in recent years, it may come as a surprise that the auto industry still accounts for nearly one-quarter of America's trade deficit. But it's true: Last year the U.S. imported $128 billion more in vehicles and auto parts than it sent abroad -- double the level of six years earlier. The trade deficit in autos was nearly as big as the one in oil. The Big Three say the dollar's strength, particularly vs. the yen, has given foreign rivals an unfair advantage.
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[AndyTiedye]

8. Which is more Foreign? A GM made in Korea, or a Honda made Here?

An "American" brand name is no guarantee of an American-made product, even for cars.

If I go to the GM website and look for the most economical car they sell (as many would in this economy)
I will be directed to the Chevy Aveo, which is imported from South Korea.

The competing models of Honda or Toyota are made in the USA, though they likely have a lot of foreign-made parts.

The situation is much better for SUVs. I can get an American-made SUV that gets the best gas mileage of any SUV in the US market and is among the least-polluting vehicles available.
Ford has been making the Escape Hybrid since 2004. I own one.

[JNelson6563]

9. I should think it matters to our hard working

souls here in America who have protection of collective bargaining and such and they work for the big 3.

Sometimes I marvel at the anti-union/anti-American pap I read on this board.

Julie

[AndyTiedye]

12. Of Course It Matters

> I should think it matters to our hard working souls here in America who have protection of collective bargaining and such and they work for the big 3.

And at least some Toyota plants. The Toyota Corolla is on the UAW-made list with an asterisk. They make some of them.

> Sometimes I marvel at the anti-union/anti-American pap I read on this board.

When I bash the UAW, it is only for their failure to organize more of the Japanese-owned auto plants here.
I know it's a tough going, that they picked the most union-unfriendly places in the country to locate many of their plants,
but the labor movement has overcome far worse in the past in this country. They need to do better than this.

Anti-American? I'm anti things that pretend to be American that aren't.

[JNelson6563]

13. Come on over to Michigan and tell me about

how the big three build their stuff elsewhere. Sure some of it is but between the main plants and all the smaller companies that make parts it matters hugely.

And UAW has nothing but sympathy from me in trying to organize down in the southern, right to work states. Those who allow that IMO are truly a special kind of stupid.

Julie

[SoCalDem]

5. Must-have-dollar-flipflops

[OHdem10]

6. Give me a break---Pray tell, how much can you really buy which

is actually made in the US.

The majority of people (at this time) have a limited amount
of money to even spend. Therefore, most people are going
to stretch the few dollars they have and often this means
imported stuff(least expensive). Even if you have the means
you really have to look and look to even find--made in America.

[bullwinkle428]

7. We're doing a heckuva job stimulating the economy of China!

[scarletwoman]

10. "...Americans are persisting in the risky habit of buying more than they sell in the global economy"

Really? Bad, bad Americans!

Yeah, let's blame "Americans" for the trade deficit -- and be sure NOT to mention the multinational corporations who moved all our manufacturing to other countries so that we "Americans" can't even FIND domestically made products to buy anymore.

Un-freaking-believable! :banghead:

sw

[xchrom]

11. Maybe if our trade agreements were different - americans

Wouldn't be buying so much stuff from off-shore?

Maybe if our workers made a better living they
wouldn't buy so much 'cheap' crap.

Buying 'cheap' does the country as a whole no good.