Trade deficit widens in June
A container barge sits moored at a container terminal in Hong Kong.
TEXT OF INTERVIEW
Bob Moon: The government is reporting another whopping trade gap. It widened surprisingly and substantially in June. Marketplace's Jeff Horwich joins us live now with the big question: Why we're buying so much more from overseas than we're selling. Good morning, Jeff.
Jeff Horwich: Good morning, Bob.
Moon: So how bad is it? How's it looking?
Horwich: Well the trade deficit increased 19 percent in June. We imported more -- especially from China -- and we sold less to other countries. Even with the economy still slumping, we managed to set a new record for our imports of consumer goods. And this trade report approaches kind of an interest bench mark: our trade deficit with the rest of the world has now returned to roughly back where it was in October 2008, when the financial crisis hit.
Moon: Now I noticed today, President Obama is signing the Manufacturing Enhancement Act of 2010. Is that going to address this trade gap?
Horwich: Well that's the hope. The main effect of the act is to suspend the import tax on a whole bunch of products that U.S. manufacturers need to buy from overseas, making them cheaper for the manufacturers to export. I was just looking through it: It's mostly a huge list of chemicals most of us can't even pronounce, but the bill also removes tariffs on certain herbicides, reusable grocery bags, and yarn made from carded camel hair.
Moon: Well how much difference could this make really?
Horwich: Well the National Association of Manufacturers hopes the bill will save about 90,000 jobs. And manufacturing hasn't fared too badly during the economic recovery, compared with other sectors -- almost 200,000 manufacturing jobs have been added in the past eight months. But they still have a lot of ground to make up for what they've lost during the recession.
Moon: Marketplace's Jeff Horwich, thanks.
Horwich: You're welcome.