U.S. Exports Growing Faster than China's

Last week, I reported that U.S. exports had hit an all-time high. In the last 12 months, U.S. exports have grown 23%, outpacing China's export growth rate of 17%.

U.S. export growth could also finally begin to put a dent in the U.S. trade deficit with China. In the first six months of this year, U.S. exports to China were 20% higher than the same time period last year, while imports from China were only up 4%. If this U.S. exports to China continue to increase, it would be reverse a 10-year trend.

Part of the shift is a result of the declining dollar,, which makes exports cheaper when compared to foreign goods and services. However, a more important shift has been the stagnation of U.S. consumer demand for imports combined with a 10% growth in Chinese consumer demand. (Source: The Economist, June trade deficit shrinks as exports climb, August 14, 2008)

What It Means to You

Increased demand in China, as well as Brazil, India and Russia, will help cushion the global economy against an extended slowdown. It will also increase U.S. exports, which will boost U.S. production and jobs.

Related Articles

• The U.S. Trade Deficit with China
• Understanding the U.S. Trade Deficit
• U.S. Current Account Deficit - Threat or Way of Life?