Trade Deficit, Part 4

10 Year Trend
Cargo imports from the world: 9.4% annual growth
Cargo imports from China: 19.8% annual growth

Clearly neither of those growth rates are sustainable in the long-term. If nothing else, China can never export more to us than the world does (since China is part of the world!).



10 Year Trend
Cargo exports to the world: 3.2% annual growth
Cargo exports to China: 20.0% annual growth

Look how wimpy our total export growth is compared to our total import growth. How can that possibly be a good thing? It might be changing somewhat in recent years simply because our dollar has fallen. However, a falling dollar implies our imports will cost us more. How is that a good thing? It seems our "something for nothing" days are now behind us.



Note that our export growth to China is virtually the same as our import growth from China. One might even argue that it is perfectly balanced. We ship them one thing. They ship us four things. This is how it has been. Why would the trend change? Aren't we lucky to have such a great trading partner!

From China's perspective, why are we suddenly upset? Why are we talking protectionist? In my opinion, it is because we've finally started to realize that we might no longer be getting something for nothing. Go figure. Whose fault is it though? China has a billion people who want to do our jobs (and drive cars that burn oil). We have millions of people content to let them. If anything, I'd blame us. I'm certainly "guilty" of buying cheaper goods.

I'd have a hard time blaming China for simply wanting what we have. In my opinion, they are doing the same thing we did in the early 1900s, only on a much grander scale. Unfortunately, at some point we won't be able to afford what they are selling any more than they can afford to see us stop. That could very well be the day when billions of people suddenly get more than a bit upset.

Source Data: U.S. Waterborne Container Trade by Trading Partners, 1997-2006