U.S. trade deficit grew last year, rising $103 billion from 2021

By SETH SANDRONSKY THE CENTER SQUARE CONTRIBUTOR

(The Center Square) - It is growing relentlessly. The U.S. trade deficit, the gap between what the nation imports and exports in goods and services, increased to $67.4 billion in December, an increase of $6.4 billion from $61.0 billion in November, revised, according to the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. The month-over-month figures on the deficit are part of a long-term trend in America.

For 2022, the deficit in goods and services hit $948.1 billion, rising $103 billion from 2021. “Exports were $3,009.7 billion, up $453.1 billion from 2021. Imports were $3,957.8 billion, up $556.1 billion from 2021,” the

Census Bureau and BEA reported.

The deficit with China, a major U.S. trading partner, rose $29.4 billion to $382.9 billion in 2022. Exports increased $2.4 billion to $153.8 billion and imports rose $31.8 billion to $536.8 billion, according to the Census Bureau and BEA.

“Growing imports eliminate existing jobs and prevent new job creation — as imports displace goods that otherwise would have been made in the United States by domestic workers,” according to Robert Scott, a senior economist and Director of Trade and Manufacturing Policy Research at the Economic Policy Institute in Washington, D.C.

In other words, low-cost imports assembled in nations such as China and Vietnam that are for sale on store shelves throughout the U.S. have a high price in terms of weakening hiring among domestic goods-producing firms. approval process so the escrow can close much faster than one where the buyer has not been fully pre-approved.

Historically, goods-producing jobs have paid high wages to nonfarm payroll workers. Thus, the trend of manufacturing job losses is a drag on the living standards of workers. Service employment tends to pay lower wages versus goods-producing jobs. In addition, a reduction in factory employment subtracts from buyer demand in the U.S. economy. Weakened purchasing power drags down the bottom lines of businesses, from small to midsize and large. Small firms are most at-risk of weakened buyer demand, lacking the cash flow and customer base to weather downturns as bigger firms can and do in the marketplace. U.S. free trade agreements have enlarged U.S. trade deficits, a near-three decade trend.

The deficit with China, a major U.S. trading partner, rose $29.4 billion to $382.9 billion in 2022. Exports increased $2.4 billion to $153.8 billion and imports rose $31.8 billion to $536.8 billion.

To be competitive with allcash offers, many buyers with fully underwritten pre-approval have been waiving their loan contingency when making an offer. There are risks to the buyer in doing this as they can still be turned down for the loan or the escrow can be delayed longer than the escrow period agreed to.

Both can jeopardize the buyer’s good faith deposit. A buyer should not do this until they have had a conversation with their lender and have a strong assurance that they will be able to obtain financing in time to close escrow as scheduled.

Typically, the most difficult and time-consuming part of purchasing a home is pulling together all the documents that are required by the lender.

By getting a fully underwritten pre-approval, a buyer can focus on the remaining aspects of the deal such as inspections, reviewing disclosures and other documents, obtaining insurance, and a host of other things that a buyer does during an escrow.

As an offer is only as strong as the buyer’s ability to close escrow, so it is important for a seller to understand the different levels of pre-qualification.

Generally, pre-qualification and pre-approval letters provided by the buyer’s lender indicate conditions that have been met and those that are still to be met.

When reviewing offers, a seller should look closely at these letters. It is also a good idea for the seller or their Realtor to speak with the lender for further assurance that the buyer will obtain financing to close on time.

Loan officers tend to be pretty forthcoming. If they say a buyer will have no trouble obtaining financing and then get turned down for the loan, it really affects the loan officer’s reputation and can jeopardize receiving future business and referrals from Realtors and their clients.

This allows Realtors to have some leverage over the loan officer as they represent repeat business. Listing agents consider a lender’s reputation when advising sellers when they are reviewing offers. Buyers who work with out-of-town lenders or those who don’t have a good reputation are usually at a disadvantage. With an out-oftown lender or an unreputable one, the agents involved generally represent a one-time deal and the lender does not worry about repeat business.

In summary, a buyer can do a lot to increase their chances of having an offer accepted and enjoy a much less stressful escrow by doing their homework and obtaining fully underwritten pre-approval prior to making offers.

Bob Curtis is a licensed Realtor