US Trade Deficit with the Far East

urlThe trade deficit that the US has is about to explode.

The Journal of Commerce is reporting that US imports from the Far East will increase in 2015; meanwhile, it seems that US exported shipments to this region will decrease.

Looking at imports, most analysis expect year over year shipments to the US from the Far East to increase by 4.5 percent in 2015. A great example would be last month, when imports increased by 16 percent. The reasons for this increase in imported goods from the Far East have little to do with logistics or ocean freight shipping. This is a result of a growing US economy. More people in the US are working. In general, there are lower energy prices and lower interest rates. That means that consumers have more money to spend on international goods and they are doing just that. There is an increased demand for these products. China meanwhile saw that their percentage of high value goods to the US continues to grow. Other nations like Vietnam are breaking their shipping records to the US.

Exports from the US to the Far East will decrease by 4.9 percent year over year. The reasons for this sudden drop in exported goods include a stronger US dollar and the recent port congestion of shipping containers. Overseas, China and Japan have sluggish economies with low consume spending, despite strong international investments. Thus, the demand is low.

Overall, this is good news for the economy, and bad news for trade. Speak to your trusted freight forwarder to see how this news impacts you.

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