THANKS, DONALD!:

As I have done in the past, I present an alternative measure of monthly international trade in the top chart above, where instead of subtracting imports from exports, I add those two terms together to measure the monthly dollar volume of total international trade activities. Because both exports ($203.4 billion) and imports ($256.5 billion) reached all-time record highs in December, the total trade volume also set a new monthly record high of $459.9 billion. It really doesn't make sense to treat international transactions as a positive contribution to the US economy when an American company sells its goods overseas, but as a negative contribution when a US company buys foreign inputs. Both activities -- buying imports and selling exports -- are important economic transactions and contribute to the total volume of trade each month.

As Mercatus Center senior research fellow Dan Griswold explained back in 2011 (my emphasis):

Politicians and commentators love to focus on the trade deficit, as though it were a scorecard of who is winning in global trade, but the real measure is the total volume of trade. As economies expand, so does trade, both imports and exports. Exports help us reach new markets and expand economies of scale, while imports bless consumers with lower prices and more choices, while stoking competition, innovation, and efficiency gains among producers.

Despite all of the almost universally negative media reports about America's "trade deficit" problem, Dan Griswold makes a very important, but almost universally overlooked, point that expanding exports and imports (and total trade activities) to record highs in December should be viewed as a sign of economic strength for the US, not a sign of economic "deterioration."

Tweet   @brothersjudd