The big question about today’s awful trade report is how much of it was just a blip and how much of it was a sign that the strong dollar is weakening U.S. competitiveness in global markets.
The trade deficit ballooned to $51.4 billion in March, the Bureau of Economic Analysis said on Tuesday. That’s more than the agency assumed when it made its initial estimate of first-quarter economic growth, meaning that when the next estimate comes out, the government will probably report that the U.S. economy shrank in the first quarter, rather than growing at a 0.2 percent annual rate.
Clearly, a big reason for the biggest trade deficit in six years is that West Coast ports got back to business, and imports arriving through them then surged. More imports mean a bigger deficit. That’s nothing to worry about for the long term, because once the backlog is cleared, imports will drop back to normal and the trade deficit will shrink. (The trade deficit is the difference between imports and exports.)