Why are U.S. exports doing so well?
Cargo cars on a freight train
TEXT OF INTERVIEW
STEVE CHIOTAKIS: Good news on the trade front. We learned today the gap between how much the nation imports and exports has narrowed. The trade deficit for July fell from the month before -- by nearly $7 billion. That comes on the heels on some of the best export numbers in two years. So that's got us asking this big question of the morning: If we're selling more stuff abroad again, could that pull us out of this downturn? Marketplace's Scott Tong is live in Washington to tell us what it all means. Good morning, Scott.
SCOTT TONG: Hi Steve.
CHIOTAKIS: So the deficit went down more than 10 percent compared to last month. Is this a surprise?
TONG: It fell more than a lot of economists expected. Americans bought fewer consumers goods and cars from abroad. So July imports fell about 2 percent to $196 billion. And the stuff we send abroad, that is exports, rose almost 2 percent to $153 billion. And as you say, that is one of the highest numbers in almost two years, Steve.
CHIOTAKIS: Now, Scott, economists watch exports closely and it's a priority for the president as well. Why are we doing so well?
TONG: Well, capital goods, like machine tools, are selling very well. And exports in general have looked good this year for the U.S. I spoke to Michael Hanson over at Bank of America Merrill Lynch. He thinks the export picture will depend more and more on the emerging economies.
MICHAEL HANSON: China and emerging markets, more generally, are going to be growing sources of U.S. exports going forward. As China starts to develop more of a domestic market that's likely to be long-run beneficial to U.S. manufacturers.
CHIOTAKIS: But China still sells way more to us than we do to them. Is the deficit number still politically charged?
TONG: Oh sure it is. And despite today's number, Congress is still expected to hold at least on hearing on China's currency, which is supposed to be appreciating, but it hasn't done much yet.
CHIOTAKIS: All right. Marketplace's Scott Tong reporting from live from Washington. Scott, thanks.
TONG: You're welcome.