Article source: ConstructConnect
Record ‘Goods’ Trade Deficit & Deterioration in ‘Services’ Surplus
In discussions about gross domestic product (GDP), foreign trade receives the attention it deserves in Canada, but it’s undervalued in the U.S. The reason undoubtedly has to do with the shares of GDP contributed by exports in the two countries.
In Canada, total exports as a share of GDP in 2019 (i.e., the last full year before the coronavirus lull) were 32%, or nearly one-third, with ‘goods’ at 26% and ‘services’ at 6%. In the U.S. in 2019, the export slice of GDP was considerably lower, 12%, with ‘goods’ at 8% and ‘services’ at 4%. But 12% of GDP is nothing to scoff at; it’s a formidable chunk, nonetheless.
Furthermore, one of America’s biggest problems at present concerns supply shortages which, in turn, are often tied to the logistical difficulties of moving cargo in and out of ports.
The U.S. has been running a foreign trade deficit for as far back as anyone can remember. Specifically, there’s been a deficit in ‘goods’ trade (a.k.a., the merchandise trade balance) that has been much larger than the surplus in ‘services’ trade.
The total or net deficit became extremely large in the several years preceding the 2008-09 recession, then it quietened down for about ten years. In 2021, however, it has roared back.
