You’d think US imports were soaring

On Oct. 13, Maine International Trade Center (MITC) invited me to deliver the keynote address at their annual Import Forum for Maine small and medium-size businesses. MITC shared state and federal trade import data with me to prepare a macro-economic backdrop to importing goods to Maine. What I saw was not surprising to me, but might surprise anyone following US political media.

One of the more important takeaways from the US trade data is that import trends closely match economic trends as a whole. Below you can see (on separate scales for ease of comparison) how closely the trends for total US economic output (shown in green) and volume of imports (shown in blue) match one another.

In Maine, import trends also mirror economic growth, but in Maine this is mainly due to the state’s outsized energy industry. Since my audience and customers are non-energy businesses, I stripped away energy imports and had a look at import trends for non-energy businesses only to Maine. What you can see in the chart below is that for most businesses, import volumes (shown in orange) are growing faster (actually, shrinking less fast) than the economy as a whole (shown in blue).

This means that Maine’s non-energy businesses are importing more of their total economic output over time so, in a sense, they are importing “more” than they used to.

This is surprising, if not particularly exciting. If you watch TV or read the news, you’d expect to see data showing exponential growth in imports or great swings in the proportion of economic output that is coming from overseas.* What we actually see, in Maine anyway, is the somewhat more mundane reality that businesses that make and sell stuff are importing slightly more of what they make over time.

But is this trend about to change soon?

My prediction is no. The steady increase in global trade generally, shown above specifically, for imports to the US and ME, is facilitated in large part by free trade agreements that the United States cannot renegotiate or abandon by presidential executive action alone. So even if the current or future president tried to remove or implement further barriers to imports, it’s unlikely that congress would agree. That means that short-term changes to US policy and law either in opposition to free trade (such as abandoning NAFTA) or in favor (such as ratifying the TPP), are unlikely to occur.

To me, all of this points to the continuation of the status quo, the slow and steady expansion of imports to the United States.

In conclusion, I’ve attached some photos of an example of the type of infrastructure improvements that facilitate the expansion of international trade. This the international port terminal in Portland, Maine, which I toured before the MITC event and which is expanding steadily with government support.

Thank you for your comments, suggestions and referrals!

Joe