World Economic Collapse Mirrored in U.S. Trade Deficit
Oct. 5, 2020 (EIRNS)—The United States’ perennial trade deficit, for which in the past a $50-55 billion deficit in any given month was extraordinarily high, reached $82.5 billion in August, a picture showing the rest of the economies of the world even more badly collapsed than that of America. While U.S. imports have not grown significantly, its major exports have dropped sharply. There is a kind “2020 recession race” of virtually all major economies, those of Europe, Japan, Brazil, India, Mexico, Canada, Russia, and so forth. All are contracting still worse than the United States’ estimated 4-5% 2020 decline.
Other factors are that those nations have provided a lower volume of household relief than the United States; and that China’s economy, which is achieving some low growth (projected at about 2% for the year), has recovered manufacturing and exports, so far, largely without any corresponding consumption recovery.
Some details: Boeing aircraft exports were 4 in August 2020, 11 in August 2019; Caterpillar third-quarter sales were 20% lower than 2019; tool-makers’ exports are about 25% lower than in 2019; the chemical industry’s exports are 16% lower than 2019, according to the American Chemistry Council.
Complicating this further is that the dollar, although it has dropped during 2020, is still significantly overvalued, by measures of productivity growth and purchasing power over decades. Rather than the schemes of the Bank of England to replace the dollar with “inflatable” digital currencies, it should be devalued in an orderly manner in negotiation with at least China, Russia, and India to set stable currency values for a New Bretton Woods credit system. This was the design of Lyndon LaRouche for more than 20 years until his death in 2019.
Since China’s trade with the nations where its Belt and Road and related project investments are being carried out, is essentially the largest growth generator in the global economy in 2020, it is foolhardy for the United States, through Secretary of State Mike Pompeo, to be trying to stop this investment and trade. At this point it’s a permissible exaggeration that for the major economies, particularly those of the United States and China, there is no successful trade without investment in such projects.