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Why is the U.S. importing so much?

Cargo cars on a freight train

TEXT OF STORY

Kai Ryssdal: We begin with international trade. Our trade, specifically, and how much more stuff we're buying from overseas than we're sending abroad. The actual statistic, in case you're curious, is $49.9 billion's worth of stuff -- the biggest our trade gap's been in almost two years. But, here's the thing: If the economy's weak -- and the Fed basically said yesterday that it still is -- why are we importing so much?

We sent Marketplace's Scott Tong in Washington to check it out.


Scott Tong: Maybe retailers are stocking up for a fall harvest. The $5 billion in additional stuff coming from overseas includes TVs, shoes, clothing, largely from China.

Catherine Mann teaches economics at Brandeis University.

Catherine Mann: Businesses that are serving the consumer at the mall do think that the consumer is gonna come back, and that retail sales will be stronger in the fall. They'd be buying now for the fall sales.

What was that? Consumers could be back -- despite the job market, despite the credit market -- to help push this economy? That would help some of the chief pushers -- manufacturers. They saw a tough June. Exports fell more than $2 billion.

Economist Michael Hanson at Bank of America-Merrill Lynch says overseas customers in places like Europe and China bought less of almost everything America sells.

Michael Hanson: Semiconductors, computers, telecoms, industrial supplies. It's kind of broad base. And it does suggest that it's, in part, some weakness abroad.

Do the math -- and weak exports and strong imports equals hefty trade deficit that will drag on America's key economic yardstick: GDP. Still, it's just one month's number, and many expect the crucial export sector to bounce back. Why? The dollar could weaken, making U.S. exports cheaper overseas.

It's tricky, but Michael Gapen at Barclays Capital says the Fed has signaled that it may pump more dollars into the system, which would send the value of the currency lower.

Michael Gapen: If you believe yesterday's action has started the Fed in motion, you could make a case for a weaker dollar going forward that would be supportive of the export sector.

That is, if our friends overseas feel confident enough to buy.

In Washington I'm Scott Tong for Marketplace.

About the author

Scott Tong is a correspondent for Marketplace’s sustainability desk, with a focus on energy, environment, resources, climate, supply chain and the global economy.
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Why are we importing more? Because people hit by the economy are shopping more at the lower cost stores like MallWart, which get their products from...

Could it be that we gave away many of the manufacturing jobs that made the items the average person uses the most. Also that China and other countries don't need and want what we are selling and making at a sufficiently great enough level. If we keep going and thinking monetary policy and the financial industry, which is portable as we have seen (a good portion of the US stimulus went overseas) we won't have much of an economy left and the dollar will inflate to wallpaper. What amazes me the most is that the people who are supposed to be leading and looking out for America are surprised. Further given the anti-monopoly rhetoric form China that it is not discriminatory again suggest we should outsource negotiations since the U. S. continuously gets the short end of the stick. But, it will be okay tomorrow if we only can live that long.

It's simple, we import so much because it's cheaper. Maybe the real question is why. We read that the American workers are the most productive, so why are products from China, Taiwan or countless other countries less costly? We can look to our government which in this case probably reflects our personal standards well. We regulate health & safety for our workers, we regulate environmental complianace to safeguard our water, air and earth. We test and certify our products to be sure we don't injure our customers. At every turn we encounter regulation, most of which is in our long-term best interest but it adds a huge cost burden to our US manufacturers. But what about the products we import? The health and safety of workers is of little concern. In some countries workers live at the factories in compounds separated from their famlies with minimal quality of life. What about the heavy mineral waste spewing into the air or running into the water supply. Do we really believe it will all stay over there? Remember grade school science where the teacher dropped a single drop of dye into the water then told you how the molecules would spread to every ocean? It's a false sense of security to think the hazards created overseas will not impact us. In the meantime the "WalMart" mind set of many Americans is putting US manufacturers out of business every day. Jobs lost, less money to spend. Federal antitrust suits have proven overseas manufacturers have dumped product into the US for less than they sell it at home. What could be their motivation? Could it be to eliminate the manufacturing base in the US thus doing away with competition? Do you really think they'll continue to sell here at those prices once they have the only game in town? It's time for we consumers to think about the livelihoods of our children. An economy cannot consist of service sector only. We need American manufacturing to survive and prosper.

Right on Mr. James A Keddie!

But logic and reason are the things you dont and shouldnt expect from main stream media like NPR. They feed constant rubbish to listeners.

Why is the US importing so much?

Yes of course, inventory build up, anticipated fall spending... hmmm.. holidays.... and so forth..

But perhaps there is a more basic reason...

Could it be... we simply don't manufacture all that much here in the USA?? And perhaps we need to rethink that a bit....?? Just asking....

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