The Ever Widening US Trade Deficit

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U.S. exports were down 3.6%, $6.8 billon, in October. Imports dropped 2.1% or $4.9 billon. The overall trade deficit crept up 4.87% to $42.24 billion from $40.28 billon. It was not always thus. From 1995 through 1999 the deficit averaged $11.8 billion. But even that average is deceptive. The deficit was relatively stable in 1995, 1996 and 1997 varying from $-5.9 billion in September 1995 to $-11.3 billion in December 1997. It was during the last two years of the decade that the deficit deteriorated dramatically. In 24 months it more than doubled from $-10.8 billion in January 1998 to $-27.4 in January 2000. The surge in imports and exports that began in the late 1990s continued, with a dip for the recession of 2001, until the financial crash in late 2008. The wide differential increases in imports and exports of 1998 and 1999 did not last. From January 2002 until July 2008 imports jumped 113.9% and exports gained a similar 110.0%. But the percentage increases were by then in 2002 operating on bases that were for imports already 37% larger that exports. In the eleven months at the height of the economic and consumer effects of the crash and recession from July 2008 through May 2009 there was a change in the behavior of the consumers and businesses. In that period imports fell from $236.5 billion to $150.9 billion, 36% while exports dropped only 24% from $165.9 billion to $126.0 billion and the trade deficit declined 62% from $65.7 billion to $24.9 billion. From April 2009 to October this year imports have increased 45.2% from $153.4 billion to $222.8 billon. Exports rose from $124.3 billion to $180.5 billion, an identical 45.2%. The matching trends in imports and exports that balloned the U.S. trade deficit from 1998 onward have returned. Is the United States destined to have an ever widening trade deficit as the population and economy expands?