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Washington, D.C. - The trade deficit figures released today by the U.S. Department of Commerce once again confirm the need for a change in American trade policy. The nation’s trade deficit for June 2006 of $64.8 remained similar to the May trade deficit of $65 billion (revised), with a decline in the exports of services The June trade deficit is an 11% increase over the same month in 2005. The trade deficit for the first 6 months of 2005 was $340 billion, which more than doubled to $716 billion by the end of that year, the largest annual deficit on record. This trend is expected to persist in 2006, as the $383 billion trade deficit for the first 6 months is expected to top $800 billion by the end of the year. The final trade deficit for 2006 will be more than double the trade deficit in 2000, of $378 billion.
“After years of record-setting trade deficits, it is painfully clear that America needs a new direction in trade policy,” said U.S. Rep. Benjamin Cardin, the Ranking Democrat on the Ways and Means Subcommittee on Trade. “Every day the Administration waits to enforce the rules of trade and level the playing field for our workers is a day lost to our competitors.”
The mounting trade deficits signal a decrease in demand for American goods, which further means that America is losing its competitive edge in international trade to countries like China.
Specifically, America’s goods deficit with China, one of our main trading partners and competitors, increased to a record $19.7 billion in June from $17.7 billion in May. China’s growing surplus, combined with America’s staggering debt causes worry for many economists concerned that the imbalance could destabilize the global economy.
Congressional Democrats have called for a new course in US trade policy including:
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Creation of a Congressional Trade Enforcer (“CTE”) to promote and protect the rights of American workers, farmers and businesses, so that instead of exporting jobs, the United States will be exporting goods and services.
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Aggressive enforcement of U.S. rights under trade agreements – The Bush Administration filed only 13 cases in the WTO in its first five years, as compared to the Clinton Administration, which brought an average of 11 cases per year.
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Filing a case on Chinese currency manipulation within the WTO
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Strengthening US anti-dumping enforcement
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Applying countervailing duties to non-market economies
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Ensuring international agreements do not weaken US trade remedy law
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