Global Demand for U.S. Services is Weakening
December 2, 2019
In recent decades, America has shifted away from manufacturing to an economy that is primarily services-driven. While we have a trade deficit in terms of goods with most of our major trading partners, the trade surplus for services such as healthcare, fincance, and payment processing has boomed. In the years between 2003 and 2015, the services trade surplus increased more than six times over, growing to $263 billion.
However, a new report from the Wall Street Journal shows that international demand for American services is weakening and the trade surplus is shrinking. This year is on track to see the biggest annual decline since 2003.
The WSJ points out that some of this is cyclical. The slowdown in the global economy and strength of the dollar means there is less demand for American services. However, some of the decline is based on domestic factors, causing American consumers and businesses to buy more foreign services.