Wolf Richter , 04 May 2021
Back when globalization by Corporate America was still a good thing, anxieties about the ballooning trade deficit in goods were medicated away with promises that exports of services – such as software, movies, and Wall Street efforts to financialize everything – would boom and balance out the trade. We’d buy cheap goods made in other countries, and they’d buy our expensive services, and it would all balance out. That was the rationale. Few economic rationales have failed more spectacularly.
Promised export boom of services turned out to be fake.
The trade surplus in services is tiny, compared to the mega-trade deficit in goods, and it keeps shrinking. In March, according to the Commerce Department today, the trade surplus in services fell to $17.1 billion, the lowest since August 2012 (compared to the record $92 billion goods trade deficit, which we’ll get to in a moment):
