AAM Statement on the Latest Monthly Trade Deficit
The May U.S. trade deficit in goods and services rose to $50.23 billion, exceeding estimates and rising by more than $6 billion over April. The trade deficit with China rose to an astonishing $25 billion, up from $21 billion in April.
Said Scott Paul, Executive Director of AAM:
The $50 billion trade deficit is a sign that something is terribly wrong with the American economy. The enormous $25 billion trade deficit with China is a sign that something is terribly wrong with the American political system.
Anyone who thinks this trade deficit is the product of market forces needs to get their head out of a dusty old textbook and take a look around at the real world. China’s exchange rate manipulation, industrial subsidies, state-owned enterprises, and weak regulations set the stage for this mess. But our government’s refusal to stop China’s cheating has made it worse.
Congress could do something today to begin to turn the tide: pass bipartisan legislation to deter China from manipulating its currency. There is no good excuse for Congress to delay action—the bill attracted 99 Republican votes last year; it will reduce the budget deficit, grow American jobs, and reduce China’s foreign reserves. So will Congress heed the wishes of Beijing and allow currency manipulation to continue unabated, or will it stand by American workers and businesses who only want a level playing field?
The Administration has failed to hold China to account, as well. The Treasury Department has let China off the hook five consecutive times by refusing to name it as a currency manipulator, despite overwhelming evidence to the contrary. This is simply inexcusable.
Washington needs to understand that our trade deficit represents a drain on jobs and federal revenues. Balancing our trade account is possible with the right kind of leadership, and it would have a positive impact on economic growth and our fiscal position. America’s economic leadership is at stake.
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