The Office of the U.S. Trade Representative is clearly excited about the just-released U.S. trade statistics for April. However, a closer look at the data shows more reasons for concern than celebration.
Trump advisor Peter Navarro added: “[T]he composition of trade is moving in precisely the right direction. Exports of goods and services hit a record $327.1 billion in April. Goods exports alone reached a record $221.3 billion. That is what a productive economy does.”
They’re disregarding some important facts.
U.S. exports of natural gas, oil, and petroleum products surged by $16.9 billion, largely due to the war with Iran. This 65.6% increase offset weak performance in other sectors. Exports of cars, trucks, nuts, meat, corn, wheat, medical equipment, boats, transportation and travel services, and financial services all fell.
Taken as a whole, non-petroleum exports of goods and services shrank by 2.9%, led by a precipitous 4.3% fall in non-petroleum goods exports.
Such a decline doesn’t happen organically. To the extent U.S. tariffs discourage imports, they reduce the ability of our trading partners to afford American-made exports. Ongoing efforts by the Trump Administration to maintain high import taxes by any means necessary effectively serve as a tax on American exports.
While one month’s change does not make a trend, the drop in non-petroleum exports of goods and services is nothing to celebrate. Instead, it should serve as a flashing warning sign to the Trump Administration and Congress that high U.S. tariffs are damaging the ability of Americans to export our goods and services around the world.