Every political leader in the world comes up with the same idea: We're going to make our economy more competitive, and export more stuff to the rest of the world

We're Getting A Fabulous Real-Time Lesson

 In The Economics Of Global Trade

Joe Weisenthal

After an economic bust, every political leader in the world comes up with the same idea: We're going to make our economy more competitive, and export more stuff to the rest of the world.
Unfortunately, by definition, not everyone can run trade surpluses, or even shrink their trade deficits all at the same time. It's always going to net out to zero (or at least it should if things were measured perfectly), and so an improvement in the balance of trade for one country is always going to result in a worsening for another country.

And that's what we're seeing right now, as the US economy turns.

Last night, Japan posted a wider than expected trade deficit of $6.5 billion, which was double what economists had expected, according to WSJ:

The deficit—almost double the forecast by economists surveyed by Dow Jones Newswires—came as exports dropped 8.1% on year on weaker Chinese and European demand for Japan-made goods, such as semiconductors. The decline was the largest in six months.

It makes sense that this news comes a few days after the Eurozone posted its trade numbers.

How we're they? Here's the BBC:

The eurozone's trade surplus hit 14.9bn euros ($18.3bn; £11.7bn) in June up from 200m euros a year ago.

The surplus was the highest since the European Union's statistics agency began collecting data in 1999.

Meanwhile, in the US, our own trade deficit shrunk more than expected last month. You can see the jump in the chart here.
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