Currency Misalignment Monitor

United States Trade Balance of Goods by Year

($ in Billions)

No Data Found

Presented by the Blue Collar Dollar Institute and the Coalition for a Prosperous America

The United States has endured growing and significant trade deficits in goods production over the past three decades, reaching almost $1.2 trillion in 2022.  In this situation, the United States imports many more goods that are produced in other countries onto its shores than it exports abroad.  As production shifts overseas, so often do jobs, creating an unfavorable employment situation in high wage sectors.

In most countries, as trade deficits grow, the currency will decrease in value compared to other currencies, making it cheaper to buy that country’s goods and allowing the trade deficit to steer back towards zero or balanced trade.  Unfortunately, in the United States the dollar continues to be overvalued.  Part of this is due to the United States acting as the world’s reserve currency.  However, part is due to developing nations, including China, maintaining a pegged exchange rate with the U.S. dollar.  By maintaining undervalued currencies and forcing the United States to have an overvalued currency, they can continue to supply cheap goods to the United States.

Impact of Overvalued Dollar to U.S. Jobs and Companies

In general, an overvalued dollar will often decrease revenues and profits for U.S. companies, resulting in lower shareholder profits and the loss of jobs:

  • Salesforce CEO reported lower revenues in 2022 due to having to “consume about $600 million of foreign exchange changes” since their previous guidance (CNBC, May 2022).
  • In 2016, Ebay’s shares plunged by 13%, partly due to a strengthening dollar as Ebay obtained half of its revenue from overseas at the time (Yahoo Finance, Jan 2016).
  • In 2022, the strong dollar’s impact on machinery, energy, and transportation cost shareholders of Caterpillar Inc. $0.41 per share in the 4th quarter (PR Newswire, Jan 2023).
  • In 2015, the strong dollar had already caused a revenue hit of $895 million for Amazon by February and Procter & Gamble expected to see one billion less in earnings over the year (Forbes, Feb 2015).
  • In 2014, Proctor & Gamble increased prices to consumers by decreasing the amount of liquid per bottle in order to keep revenues up (CNBC, Nov 2014).
  • One study shows that realigning the dollar would create almost 4 million jobs including over 1.3 million in high wage manufacturing and construction over a 5 year period (CPA, Nov 2021).

Currency Misalignment Monitors by Month

The Currency Misalignment Monitor measures how much 34 major currencies would have to move to bring global currency accounts (and thus trade) into balance over the next five years.  A negative number like in the United States indicates an overvalued currency (a negative trade situation) while a positive number indicates an undervalued currency (a positive trade situation).  Below you can review our Currency Misalignment Monitor’s published monthly.