Pinch in Exports

For the first peacetime month since the depression times of 1937, the U.S. imported more than it exported last June. Excluding military goods, exports dipped to $1,348,000,000 and imports rose to $1,369,000,000, up a walloping 33% from the year-ago level. Reporting the figures last week, the Commerce Department warned the U.S. to expect several more months of trade imbalance. In 1959 the U.S. will show an export surplus, but just barely. Exports, which dropped from a record $19.5 billion in 1957 to $16.3 billion last year, will slide to an estimated $16 billion. Imports will go up from $12.8 billion to about $15 billion.

These figures are the latest and sharpest reminder of the steady erosion in the once dominant U.S. trade position around the world. As the industrial plants of West Europe and Japan (see below) become larger and more efficient, often by adopting U.S. methods and automation, competition for world markets grows tougher by the day. The U.S. is being challenged in some of its prime markets, notably in Latin America, by everything from foreign-made appliances to agricultural machinery.

Nosing down are U.S. shipments of aircraft (foreign lines are waiting for the jets), cotton (buyers are holding back for a price cut expected later this year), coal (Europe has a big surplus). Dropping also are exports of machinery and steel, cars and oil, for the same reasons that U.S. imports of them are steaming up: the foreign products are plentiful, low in price and of good quality. Comparing the first halves of 1958 and 1959, U.S. imports of electrical apparatus, electronics parts and transistor radios went up from $72 million to $96 million, imports of industrial machinery from $89 million to $115 million, iron and steel products from $93 million to $229 million, cars and parts from $248 million to $424 million, oil and its products from $806 million to $842 million.

No responsible economist predicts a serious or sustained U.S. trade imbalance ahead. But no one foresees the big, fat trade surpluses that the U.S. long enjoyed --$6.5 billion as recently as 1957. At best, says Under Secretary of State C. Douglas Dillon, exports will rise $1 billion in the next year, led by lower-priced U.S. cotton and the new jets. These new realities of world trade have moved the Administration to take a sterner view of foreign nations that still jealously preserve high tariffs and import quotas against dollar goods long after the need is past. At next month's annual meeting of the World Bank in Washington, the Administration will launch its strongest campaign yet to persuade other nations to ease their trade barriers against the U.S.

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