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Trade Deficit Hit Highest Point Since 2008 Last Year

Feb. 9, 2021
Despite a slight dip in December, 2020 was a boom year for the U.S. trade deficit.

The deficit between U.S. exports and imports hit a 12-year-high in 2020 as the COVID-19 pandemic hammered supply chains around the world. Full-year results for 2020 showed a deficit of $678.7 billion, 17.7% more than 2019 and the highest full year deficit since 2008.

That’s despite a slight dip in the monthly deficit in December, which saw a trade deficit of $66.6 billion, down $2.4 billion from November’s $69.0 billion. Pending revisions to the December figures, November had the highest single-month trade deficit of the year, but December’s three-month moving average, $66.5 billion, was the highest deficit period of the year.

Monthly Results

The United States exported $190 billion in goods in December, $6.2 billion more than in November, and December imports increased by $2.8 billion to $256.6 billion. The goods deficit specifically dropped $2.8 billion to $84.2 billion while the services deficit fell by less than half a billion dollars.

Exports of industrial supplies and materials in December rose by $1.8 billion, including crude oil, which increased by $1.3 billion alone. Capital goods exports rose $1.1 billion, and exports of automotive vehicles and parts rose by $900 million.

Imports of those same goods rose at a higher rate in December, though: industrial supplies imports rose by $2.7 billion, with finished metal shapes accounting for $1.2 billion of the increase. Automotive imports rose $2 billion, including $1.6 billion in passenger car imports. Imports of consumer goods like cell phones, pharmaceutical preparations fell $1.9 billion.

Annual Results

Exports and imports both fell last year. The U.S. exported $2.1 trillion last year, down almost $396.4 billion compared to 2019; during the same period, they imported $2.8 trillion in goods and services, $294.5 billion less than in 2019.

Notable export losses included civilian aircraft and aircraft engines, consumer vehicles, and auto parts and engines. Exports of civilian aircraft fell $27.4 billion, and sales of engines for those aircraft decreased by $18.4 billion. Falling auto exports accounted for $35.3 billion in lost exports as the U.S. shipped out $13.3 billion less in automotive parts and accessories and $10.5 billion fewer in passenger cars.

Imports of goods to the U.S. fared better, but still fell. Auto imports fell $65.2 billion, including $33.4 billion less in imported passenger cars, $15.3 billion less in imported parts and accessories, and $10.8 billion less special purpose vehicles. Commercial airplane engine imports fell $11.1 billion and other airplane parts fell $6.7 billion. Imports of computers, however, actually grew by $11.5 billion.

The United States trade deficit with China remains its largest. In 2020, the U.S.-China trade deficit was $310.8 billion, although it fell $34.4 billion over the course of the year. Exports to China grew by $18.2 billion to $124.6 billion while imports fell $16.2 billion to $435.4 billion.

The U.S. also maintained trade deficits with the European Union ($183.4 billion), Mexico ($112.7 billion), Germany, Switzerland, Ireland, Japan, Malaysia, Taiwan, Italy, Thailand, South Korea, India, France, Canada, Indonesia, and Russia.

Notably, the U.S. deficit with Switzerland more than doubled, driven to $56.7 billion by $30.1 billion in new exports while imports increased by a mere $0.1 billion.

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