IT SCHEISS: U.S. TRADE DEFICIT IN GOODS EXCEEDS SURPLUS IN SERVICES BY MINUS 621 BILLION USD

In all my 20 or so years of writing about the information and communication technology (ICT) and services industry in Malaysia and worldwide, during which time I heard no end from marketers in the industry and from Malaysian government policy makers and officials influenced by futurist paperback writers and CON-sultants, that Malaysia had to "move up the value chain" away from "sunset" industries such as manufacturing and agriculture to "sunrise" industries such as information and services economy if we are to continue to survive and prosper economically and join the ranks of the advanced economies.

I never bought into that crap and over the years I have noticed that as "sunset" industries departed Malaysia for our lower wage neighbours, they experienced an economic sunrise, whilst we experienced a sunset as we moved further towards embracing "sunrise" industries.

Well now analyst and statistics firm Statista comes out with figures which show that the U.S. trade deficit in goods (manufactured) reached a record high of minus US$891.3 billion in 2018 during the period 1990 to 2018, whilst U.S. trade surplus in services grew to US$270.2 billion in 2018 and flat at around that level since 2014, with a nett trade deficit in goods and services of minus US$621 billion.

No wonder Donald Trump won in 2016 based upon promises to address this huge trade deficit, the concerns of the U.S. working class who are suffering as a result, with jingoistic promises to "Make America Great Again".

Such chronic dire economic conditions have often preceded imperialist wars, in order to redivide the world, destroy lives, buildings, industries, infrastructure and so forth, after which there will be fresh demand to rebuild and recreate which gives capitalist economies an opportunity to thrive and profit again in the aftermath, such as during the periods after the first and second world wars.

If you want to understand why U.S. imperialism under Trump is having trade wars with China, imposing sanctions on Russia, North Korea, Iran, Venezuela, Cuba and so forth, and forever stirring up conflicts in the Middle East either by proxy or directly, look no further than the chart below, courtesy of Statista and Statista's explanation of the trend below it:-

International Trade

U.S. Trade Deficit in Goods Reaches Record High

by Felix Richter, Mar 7, 2019

Despite all efforts by the Trump administration to reign in the country's trade deficit, the gap between imports to and exports from the United States climbed to a 10-year high in 2018. According to figures released by the U.S. Census Bureau on Wednesday, the U.S. trade deficit in goods and services shot up to $621 billion last year, the highest it's been since 2008. The increase was mainly caused by a historically high deficit in goods trade, which amounted to a record $891 billion, of which $419 billion can be traced back to trade with China alone.

While Trump has often stated his disapproval of America's large trade deficit, arguing that the U.S. is on the losing side of world trade, there are several factors playing into the growing deficit, not all of which are bad. First and foremost, the U.S. economy is doing very well at the moment, resulting in strong demand for goods, many of which are manufactured abroad. At the same time, economic growth in China has slowed significantly last year, which reduced demand for American goods in the world's second largest economy. The strong dollar also contributes to the deficit as it makes U.S. goods relatively more expensive to foreign buyers while making imports to the U.S. relatively cheaper.

https://www.statista.com/chart/17281/us-trade-balance/

Meanwhile, on Page 18, The EDGE Financial Daily of 08 March 2019 reports the same, showing the largest portion of the U.S. trade deficit being U.S.$419.2 billion with China in 2018, followed by U.S.$169.3 billion with the European Union, U.S.$ 26.5 billion with Malaysia, followed by U.S.$21.3 billion with India and so forth:-

So, if Malaysia insists on moving away from agriculture and manufacturing towards a "high income, knowledge-based, information rich" economy by 2020 (oops! postponed to 2024), we'll be in the same predicament as the U.S., whilst our leaders proudly proclaim that we are "up there with the advanced countries".

After all, the services sector contributed 68.88% towards Greece's gross domestic product (GDP) in 2017. so Malaysian ministers and economic planners may want to visit Greece to learn how that country had managed to achieve such a thriving services economy to become of the richest and one of the most affluent countries in Europe, with one of the highest standards of living in the world and an excellent example for Malaysia to emulate and strive towards becoming by downplaying the "sunset" industries in favour of "sunrise" industries.