The first two advance looks at America’s inflation-adjusted growth and its real trade deficit for late- and consequently full-year 2024 …Continue reading →
The first two advance looks at America’s inflation-adjusted growth and its real trade deficit for late- and consequently full-year 2024 are now in. (Revisions will be coming in over the next few months of course.) One finding that stands out right away: There’s no sign that, as widely reported, (e.g., here and here), Americans have started ramping up imports for fear that President Trump’s tariff plans will supercharge consumer prices.
The latest data come from the monthly trade report for December and at first glance, it does look like an import surge indeed took place. According to yesterday’s release, goods imports (the ones on which Mr. Trump has always focused) rose sequentially by 4.04 percent, to a new all-time high ($293.14 billion). And in November, they were up 4.34 percent.
But some of the details throw a bucket of cold water over the surge claims. In the first place, of the $11.29 billion absolute monthly goods import increase reported by the U.S. Census Bureau (which tracks the trade data), fully 81.14 percent came in a single category: finished metal shapes. No disrespect to that industry, or to the Census folks, but doesn’t that look just a little bit fluky?
In addition, a big goods imports increase was also registered in September (3.95 percent), when Democratic presidential nominee Kamala Harris, an avowed tariff opponent, led comfortably in the polls. Yet in October, when she still led in the polls, such purchases sank by 5.49 percent. (See here for the polling data.)
For good measure, substantial monthly goods imports advances were also seen last February (2.75 percent) and April (3.36 percent.) From these numbers, it’s hard to see any relationship between the perceived imminence of tariffs and actual goods imports at all.
Tariff surge supporters can note that on a September through December basis (from the unofficial start of the general presidential campaign through year’s end), goods imports climbed by a total of 2.61 percent. During the same period in 2023, they dipped by 0.26 percent.
At the same time, 2023 overall was a relatively weak year for goods imports. They fell by 4.95 percent. Last year, they jumped by 6.02 percent.
In addition, any country’s imports were ever going to be targeted by Mr. Trump for tariffs, it was always going to be China’s. Yet between last September and December, they dropped by 12.85 percent in total on a monthly basis. Over the same time span in 2023, they tumbled by a somewhat faster 15.28 percent. But does that comparison reveal a 2024 import surge?
Inflation doesn’t make any difference, in the direction of these findings either. Unlike the monthly trade reports, the trade figures contained in the U.S. Bureau of Economic Analysis’ quarterly releases on the gross domestic product (GDP) are presented in price adjusted terms. And they debunk the import surge as well.
According to the data underlying the latest such release, which came out last week, goods imports dropped by 1.02 percent sequentially in the fourth quarter of last year. But during the third quarter, a period when for the most part Harris’ chances of a White House win looked solid, goods imports actually rose – by 2.57 percent.
For some context, earlier in 2024, imports increased notably, too, on a sequential basis. In the second quarter, all after-inflation imports were up by 1.84 percent and goods imports advanced by 2.03 percent, and in the first quarter, they rose by 1.50 percent and by 1.58 percent, respectively. That was less than in the third quarter, but hardly a decrease, or even a flatline.
And on a yearly basis, during the second half of 2024, real goods imports were up 1.52 percent cumulative. During the second half of 2023, they rose somewhat faster – by 1.70 percent. Again, where’s the relationship between perceived tariff imminence and the amount of goods imports?
It’s entirely possible that upcoming January monthly data (and, to an extent, upcoming first quarter data) will reveal that these foreign purchases have just skyrocketed. But for now, that’s conjecture. So far, though, it’s unmistakable that claims of an import are not only “greatly exaggerated’ (as Mark Twain might have said). They’re totally fabricated.
