U.S. Trade Deficit Soars 27% to Record $859 Billion in 2021 as Imports surge from Inflation and Tariffs.

The US trade deficit in December was $80.70 Billion up from prior month’s $79.30 billion. The China and US trade deficit rose to -$355.3 B for the year. The US trade gap for 2021 in both goods and services rose 27% to hit $859 billion, an annual record as imports grew faster than exports. Imports surged 20.5% with higher prices from inflation and tariffs.

China Tiajin Port

Highlights

  • The US trade Deficit rose in both goods and services rose 27% to hit $859 billion in 2021, an annual record as imports grew faster than exports.
  • The imports surged 20.5% or $576.5 billion in 2021
  • The exports were up 18.5% or $394.1 billion.
US Trade Deficit
  • In December the deficit increased to $80.7 billion from a downwardly revised $79.3 billion gap in November and close to a record high of $80.8 billion in September
  • Imports surged to an all-time high as businesses were restocking the shelves.
  • Exports hit ll-time high driven by shipments of consumer goods, such as pharmaceutical preparations, civilian aircraft engines, passenger cars and nonmonetary gold.

Deficit Source by Country

China remains the single largest source of the U.S. trade deficit, accounting for $355.3 billion of the total deficit in 2021, or 41% of the total. This was up from $310.3 billion in 2020, but reflected a lower percentage of the total deficit.

“The US trade deficit widened significantly in 2021, and the deficit with China contributed to that,” said Charles Seville, co-head of Americas sovereign credit ratings at Fitch. “A wider US trade deficit reflects a surge in US spending on goods.”

The next-largest single-country trade deficit posted by the U.S. in 2021 was with Mexico, which exported $108.2 billion more in goods and services to the U.S. than it imported, a decline from a deficit of $113.7 billion in 2020.

The U.S. also ran a net deficit with the countries of the European Union, importing $219.6 billion more in goods and services than it exported, an increase of 19.1% over 2020. However, the net deficit with the EU reflected roughly the same percentage of the total trade deficit, about 26%, as it had a year earlier.

Source: bea

From The Traders Community News Desk