Pandemic-era supply shortages are aggravating the U.S. trade deficit. According to the latest report on international trade from the Census Bureau, the gap between goods the U.S. exports and the goods and services it imports from abroad rose more than 5% in June to a record high, driven by a substantial increase in imports of industrial supplies and materials.
In June 2021, the Bureau says, the U.S. imported $283.4 billion worth of goods and services, compared to only $207.7 billion in goods and services exported. That nets a trade deficit of $75.7 billion—6.7% larger than it was in May, 46.6% bigger than it was in June 2020. The three-months moving average deficit rose slightly, by $200 million to $71.9 billion.
The newly growing trade gap, which narrowed slightly in May, was driven largely by a substantial increase in imports of industrial supplies and materials, which drove them to break their own records. U.S. goods exports rose slightly to $145.9 billion, but at the same time, goods imports rose by $4.3 billion to $53.5 billion, a new record high. $4.2 billion of the increase came from imported supplies like metals and chemicals. Imports of nonmonetary gold rose by $1.2 billion, finished metal shapes by $500 million, iron and steel mill products $400 million, and organic chemicals $400 million.
According to the Institute for Supply Management, supply availability remains a major thorn in the side for many manufacturers trying to meet high demand. The ISM’s latest report on manufacturing business listed an unusually high number of supplies rising in price and short supply. Prices for aluminum, copper, and steel have been increasing for several months now, the ISM found, and steel products have been in short supply for half a year.
The United States’ largest deficit is still with China, with which it has a $27 billion trade gap. The U.S. trade gap with the European Union increased $1.1 billion to $19.6 billion in June driven by $1.7 billion in new imports, and the bronze medal for biggest trade gap with the U.S. in June went to Mexico, which exports $7.2 billion more to the U.S. than it imports from its northern neighbor.
