Connect with us

Oil and Gas

The Race for Arctic Domination

Published

on

See full-size infographic for more legibility.
The Race for Arctic Domination

The Race for Arctic Domination

Note: see full-sized infographic for more legibility.

In the year 1776, James Cook was dispatched from Great Britain on an important mission: to discover the Northwest Passage. The famed hypothetical route from the Pacific to the Atlantic was a primary motivation for many British expeditions to the New World. Such a route would expedite trade between Europe and Asia, creating wealth for the kingdoms and merchants that could navigate it. The British government tried to motivate explorers even more by putting into law that there would be a prize of £20,000 for whoever could make such a discovery.

After spending some time in Hawaii, Cook came at it from the Pacific side. He and his crew searched northwards along the long coast of British Columbia, and eventually made his way in between Alaska and Russia through the Bering Strait. Seeing nothing but icebergs, it became clear that there was no navigable passage that could be seen.

For close to 300 years, explorers had searched for such a route, but ice and cold made it ultimately impossible for the technology of the day. Even Robert McClure, who was credited with the discovery of the Passage, got stuck in ice for three winters near Banks Island and had to be rescued.

Today, these routes through Northern waters have regained importance. Over recent decades, ice has thawed in the Arctic and 2008 became the first year that both the Northeast Passage (North of Russia) and the Northwest Passage (North of Canada) were open to ships simultaneously. This means it may be the first time that a vessel could theoretically circumnavigate the North Pole in 125,000 years.

Not surprisingly, countries such as Russia, Canada, Norway, Denmark, and the United States have taken notice and are posturing accordingly. The thawing waterways of the Arctic are the potential home to shipping routes, natural resources, and other territorial claims. For example, the US Geological Service estimates that the Arctic is home to 13% of the world’s undiscovered oil, as well as 30% of its undiscovered natural gas.

However, nation-states are not the only group engaged in this Battle Royale. Environmentalists have also entered the ring, and they’ve already helped to deliver a solid takedown. In September 2015, Royal Dutch Shell announced that they would abandon their Arctic drilling campaign even after spending $7 billion on the well. Realistically, there were several reasons for the change of plans, but traction on behalf of environmentalists definitely played a key role.

While some experts are referring to this as a new Cold War (pun likely intended), the conquest for Arctic domination is certainly heating up.

Original graphic by: SCMP

Click for Comments

Commodities

Charted: What’s Driving the U.S. Trade Deficit?

This graphic the U.S. trade deficit growth since 1990, and how manufactured goods and fuels factor in over the last three decades.

Published

on

2022 US Trade Deficit Shareable

How Manufactured Goods Dominate the U.S. Trade Deficit

The United States has had many major trading partners over the decades, with annual imports and exports from them both totaling trillions of dollars.

Ever since the 1970s, the country’s imports started to overshadow exports and the U.S. trade deficit began to grow. Once the 1990s began, fueled by globalization-friendly policies around the world and cheap international goods, the trade deficit began to climb even more rapidly.

In this graphic, Ehsan Soltani uses data from the World Trade Organization to highlight the role of manufactured goods in the rising U.S. trade deficit over the last three decades.

U.S. Trade Deficit in Goods From 1990 to 2022

In 2022, the U.S. trade deficit for goods hit $1.31 trillion, consisting of more than $3 trillion in imports and offset by $2 trillion in exports. That’s a growth of 40% over a decade from a deficit $791 billion in 2012.

YearU.S. Exports
(Total)
U.S. Imports
(Total)
Trade Surplus/Deficit
2022$2,065B$3,376B-$1,311B
2021$1,754B$2,935B-$1,183B
2020$1,425B$2,407B-$982B
2019$1,643B$2,567B-$924B
2018$1,664B$2,614B-$950B
2017$1,546B$2,408B-$862B
2016$1,451B$2,250B-$799B
2015$1,503B$2,315B-$813B
2014$1,621B$2,413B-$792B
2013$1,580B$2,329B-$749B
2012$1,546B$2,337B-$791B
2011$1,483B$2,266B-$784B
2010$1,278B$1,969B-$691B
2009$1,056B$1,605B-$549B
2008$1,287B$2,169B-$882B
2007$1,148B$2,020B-$872B
2006$1,026B$1,918B-$892B
2005$901B$1,733B-$832B
2004$815B$1,526B-$711B
2003$725B$1,303B-$578B
2002$693B$1,200B-$507B
2001$729B$1,179B-$450B
2000$782B$1,259B-$477B
1999$696B$1,059B-$364B
1998$682B$944B-$262B
1997$689B$899B-$210B
1996$625B$822B-$197B
1995$585B$771B-$186B
1994$513B$689B-$177B
1993$465B$603B-$139B
1992$448B$554B-$106B
1991$422B$508B-$87B
1990$394B$517B-$123B

When compared to trade numbers from the early 1990s and 2000s, its clear how much U.S. trade as a whole has grown.

In 1992, the U.S. trade deficit for goods sat at only $106 billion, with imports totaling $554 billion and exports totaling $448 billion. Just a decade later by 2002, the deficit had already climbed by five times.

Manufactured Goods Trade Outshines Fuel

Analyzing the subtleties in the country’s deficit in traded goods also shows how U.S. reliance on other countries has changed over the years.

In 1990, the deficit incurred from trading manufactured goods—which doesn’t include fuel, mining production, agricultural products, or services—contributed to 69% of the total U.S. goods trade deficit.

YearU.S. Exports
(Manufactured)
U.S. Imports
(Manufactured)
Trade Surplus/Deficit
2022$1,196B$2,569B-$1,372B
2021$1,079B$2,256B-$1,177B
2020$915B$1,892B-$976B
2019$1,036B$1,994B-$958B
2018$1,050B$2,016B-$966B
2017$1,008B$1,872B-$864B
2016$969B$1,775B-$806B
2015$1,008B$1,811B-$803B
2014$1,052B$1,752B-$700B
2013$1,020B$1,650B-$629B
2012$1,009B$1,619B-$610B
2011$969B$1,524B-$555B
2010$872B$1,369B-$497B
2009$725B$1,122B-$397B
2008$973B$1,417B-$443B
2007$909B$1,409B-$500B
2006$829B$1,350B-$522B
2005$674B$1,238B-$564B
2004$618B$1,134B-$516B
2003$589B$990B-$401B
2002$571B$934B-$363B
2001$602B$906B-$303B
2000$646B$968B-$322B
1999$575B$843B-$268B
1998$558B$758B-$199B
1997$553B$699B-$145B
1996$485B$634B-$150B
1995$450B$608B-$158B
1994$399B$540B-$141B
1993$356B$465B-$109B
1992$340B$420B-$79B
1991$319B$380B-$61B
1990$290B$376B-$85B

Since then, despite the country exporting billions of dollars of products, the deficit caused by imported manufactured goods has only grown. In 2021, it crossed $1 trillion in deficit alone.

Part of that growth is directly tied to increasing imports from China over the 21st century. From 2001 to 2018, China’s exports to the U.S. accounted for 59% of the latter’s increasing manufacturing trade deficit, ranging in goods from electronics to machinery.

2022 U.S. trade deficit

However, the U.S. managed to recover some of this deficit through surplus fuel exports, which have been increasing over the same time period.

YearFuel Exports Fuel ImportsFuel Surplus/Deficit
2022$378B$323B$56B
2021$240B$224B$16B
2020$155B$130B$25B
2019$200B$210B$-10B
2018$193B$242B$-49B
2017$139B$204B$-65B
2016$94B$163B$-69B
2015$104B$200B$-96B
2014$155B$358B$-203B
2013$149B$389B$-240B
2012$137B$433B$-295B
2011$130B$463B$-332B
2010$81B$364B$-283B
2009$55B$279B$-224B
2008$77B$502B$-425B
2007$42B$372B$-330B
2006$35B$345B$-310B
2005$27B$301B$-275B
2004$19B$217B$-198B
2003$14B$163B$-149B
2002$12B$122B$-110B
2001$13B$129B$-116B
2000$13B$140B$-126B
1999$10B$79B$-69B
1998$10B$62B$-52B
1997$13B$83B$-70B
1996$12B$77B$-65B
1995$10B$63B$-53B
1994$9B$60B$-51B
1993$10B$59B$-49B
1992$11B$59B$-47B
1991$12B$58B$-46B
1990$12B$69B$-56B

Historically the U.S. was a larger fuel consumer than producer, and was heavily affected by soaring oil prices from 2003 to the Great Recession. In 2008, the United States trade deficit in fuel hit $425 billion.

But a boom in shale oil production has seen the country rapidly increase production and exports, becoming the world’s largest crude oil producer. Despite falling oil prices, by 2020 the U.S. managed to erase its fuel trade deficit.

Will The U.S. Trade Deficit Keep Growing?

The dominance of manufactured goods in the U.S. trade deficit poses a significant challenge for policymakers and businesses.

On one hand, the country’s reliance on other countries for cheaper parts and labor has allowed its economy to benefit. But it has also become increasingly susceptible to tariffs, slowdowns in other countries, and trade wars.

While there are efforts in place to promote domestic manufacturing, such as in semiconductor chips, the effects have yet to dent the goods trade deficit.

Continue Reading

Subscribe

Popular