Trump plan to use distorted trade data draws ire

washington - Trump team directs staffers at the White House to engineer unusually rosy growth and revenue forecasts

US President Donald Trump has reportedly ordered a change to the US trade deficit calculations to bolster his argument against trade deals, but analysts say this could undermine a key economic indicator.

The news follows other reports that the Trump team also has directed career staffers at the White House to engineer unusually rosy growth and revenue forecasts to support ambitious budget proposals from the new administration.

These moves have stoked fears about the credibility of economic data under Trump.

Over their objections, officials at the office of the US Trade Representative's office last week produced new trade balance data using a methodology that exaggerates deficits with key US trading partners such as Mexico, The Wall Street Journal reported on Sunday.

The picture of yawning trade gaps could help Trump's stance that the US is getting the short end of the stick in free trade deals.

Trump repeatedly has vowed to renegotiate the North American Free Trade Agreement with Canada and Mexico - which he has called a "disaster" - and senior US officials are in Mexico this week for meetings at which trade is one item on the agenda.

The alternate trade data - intended for consumption on Capitol Hill, according to The Journal - could help the Trump administration garner support among lawmakers for what he says is the need to renegotiate those trade pacts.

At issue in the new trade figures is the question of "re-exports," or imported goods which transit the United States on their way to be sold in a third country.

By excluding those goods from the tally of US exports, but keeping them in the calculation of imports, trade deficits would appear to be much larger than the official data indicate.

Alan Deardorff, professor of international economics at the University of Michigan, said altering the data is problematic.

He told AFP that "excluding re-exports from exports but not from imports would create nonsense data." "If all countries were to do that, then international trade data for the world would have far more imports than exports," he said.

Former US treasury secretary Larry Summers warned that manipulating statistics for political advantage would spur protectionism. - AFP