How the United States Trades with the World: A Statistical Analysis
The United States is one of the largest and most influential economies in the world, with a gross domestic product (GDP) of $21.4 trillion in 2020. Trade is an important component of the US economy, as it affects the production, consumption, employment, and income of millions of Americans. In this article, we will examine the main features and trends of US trade in goods and services, using the latest data from various sources.
US Trade Balance
The trade balance is the difference between the value of exports (goods and services sold to foreign countries) and imports (goods and services bought from foreign countries). A positive trade balance means that exports exceed imports, while a negative trade balance means that imports exceed exports. The trade balance reflects the competitiveness, demand, and supply of a country’s products in the global market, as well as its exchange rate, trade policies, and consumption patterns.
According to the US Bureau of Economic Analysis (BEA), the US had a trade deficit of $69 billion in May 2023, down from $74.4 billion in April 2023. The trade deficit decreased as imports fell more than exports, mainly due to lower imports of consumer goods, industrial supplies, and capital goods. The US has been running a trade deficit since 1976, as its imports have consistently outpaced its exports. The trade deficit reached a record high of $916.3 billion in 2006, before narrowing to $384.9 billion in 2009 due to the global financial crisis. Since then, the trade deficit has widened again, reaching $915.8 billion in 2020.
The US trade deficit is largely driven by its trade in goods, which accounted for 87% of total imports and 66% of total exports in 2020. The US had a goods deficit of $91.3 billion in May 2023, down from $96.1 billion in April 2023. The US has been running a goods deficit since 1975, as it imports more manufactured goods, such as cars, computers, and clothing, than it exports. The goods deficit reached a record high of $864.3 billion in 2018, before narrowing to $828.9 billion in 2020.
On the other hand, the US has a trade surplus in services, which accounted for 13% of total imports and 34% of total exports in 2020. The US had a services surplus of $22.3 billion in May 2023, up from $21.6 billion in April 2023. The US has been running a services surplus since 1971, as it exports more services, such as travel, education, and financial services, than it imports. The services surplus reached a record high of $281 billion in 2018, before declining to $237 billion in 2020.
US Trade Partners
The US trades with almost every country in the world, but some countries are more important than others for its trade flows. According to the World Bank’s World Integrated Trade Solution (WITS), the US exported goods worth $1.43 trillion to 222 countries and imported goods worth $2.41 trillion from 223 countries in 2020.
The top five export destinations for US goods in 2020 were Canada ($255 billion), Mexico ($212 billion), China ($135 billion), Japan ($67 billion), and Germany ($57 billion). These five countries accounted for 50% of total US goods exports in 2020. The top five import sources for US goods in 2020 were China ($452 billion), Mexico ($358 billion), Canada ($324 billion), Japan ($132 billion), and Germany ($125 billion). These five countries accounted for 56% of total US goods imports in 2020.
The top five export destinations for US services in 2019 (the latest year available) were United Kingdom ($78 billion), Canada ($67 billion), Ireland ($57 billion), China ($56 billion), and Japan ($46 billion). These five countries accounted for 42% of total US services exports in 2019. The top five import sources for US services in 2019 were United Kingdom ($76 billion), Canada ($33 billion), India ($29 billion), Japan ($28 billion), and Germany ($27 billion). These five countries accounted for 38% of total US services imports in 2019.
US Trade Products
The US exports and imports a wide variety of products, ranging from agricultural products to high-tech products. According to WITS, the US exported 4,526 products at the six-digit level of the Harmonized System (HS) classification and imported 4,525 products at the same level in 2020.
The top five export products for US goods in 2020 were refined petroleum ($83 billion), petroleum gas ($71 billion), crude petroleum ($68 billion), cars ($55 billion), and integrated circuits ($51 billion). These five products accounted for 23% of total US goods exports in 2020. The top five import products for US goods in 2020 were cars ($139 billion), crude petroleum ($120 billion), computers ($102 billion), broadcasting equipment ($101 billion), and packaged medicaments ($86 billion). These five products accounted for 23% of total US goods imports in 2020.
The top five export products for US services in 2019 were travel ($193 billion), charges for the use of intellectual property ($131 billion), financial services ($119 billion), business services ($117 billion), and transport ($92 billion). These five products accounted for 76% of total US services exports in 2019. The top five import products for US services in 2019 were travel ($179 billion), transport ($100 billion), business services ($97 billion), charges for the use of intellectual property ($49 billion), and financial services ($46 billion). These five products accounted for 77% of total US services imports in 2019.
US Trade Policy
The US trade policy is determined by the executive and legislative branches of the federal government, as well as by various agencies, such as the Office of the United States Trade Representative (USTR), the Department of Commerce, and the International Trade Commission. The US trade policy aims to promote free and fair trade, protect national security and economic interests, enforce trade laws and agreements, and support economic development and cooperation.
The US is a member of several multilateral trade organizations, such as the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD), and the Asia-Pacific Economic Cooperation (APEC). The US also has bilateral or regional trade agreements with several countries or groups of countries, such as the North American Free Trade Agreement (NAFTA) with Canada and Mexico, the United States-Mexico-Canada Agreement (USMCA) that replaced NAFTA in 2020, the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) with six Central American countries and the Dominican Republic, and the United States-Korea Free Trade Agreement (KORUS) with South Korea.
The US trade policy has undergone significant changes in recent years, as different administrations have adopted different approaches and priorities. Under the Trump administration (2017-2021), the US adopted a more protectionist and unilateral stance, imposing tariffs on several countries, especially China, renegotiating existing trade agreements, withdrawing from or suspending new trade negotiations, and challenging the WTO’s dispute settlement system. Under the Biden administration (2021-present), the US has signaled a more multilateral and cooperative approach, rejoining or resuming new trade negotiations, suspending or removing some tariffs, supporting the WTO’s reform, and addressing new issues, such as climate change, digital trade, and human rights.
The United States is a major player in global trade, as it exports and imports a large amount of goods and services to and from many countries. The US trade balance is negative, as its imports exceed its exports, mainly due to its trade in goods. The US trade partners are diverse, but some countries are more important than others for its trade flows. The US trade products are varied, but some products are more dominant than others for its trade flows. The US trade policy is dynamic, as it changes according to different administrations and circumstances.
U.S. Imports and Exports: Trends and Statistics
The United States is the world’s largest economy and a major player in global trade. The U.S. engages in trade with many countries, importing goods and services that Americans demand and exporting goods and services that other countries want. In this blog post, we will look at some of the latest trends and statistics of U.S. imports and exports, and how they affect the U.S. trade balance and the global demand for U.S. products.
U.S. Trade Deficit Decreased in May 2023
According to the latest data from the U.S. Bureau of Economic Analysis (BEA) and the U.S. Census Bureau, the U.S. monthly international trade deficit decreased in May 2023 by $5.4 billion, from $74.4 billion in April 2023 (revised) to $69 billion in May 2023 . This decrease was mainly due to a larger decrease in imports than in exports, as imports fell by $22.4 billion (-8.21%) while exports fell by $10.7 billion (-6.19%) . The goods deficit decreased by $4.8 billion to $91.3 billion, while the services surplus increased by $0.7 billion to $22.3 billion .
The decrease in imports and exports was partly attributed to the impact of the COVID-19 pandemic on global trade, as well as supply chain disruptions, labor shortages, and rising transportation costs that affected both domestic and foreign demand . Some of the major categories of goods that saw a decline in imports were consumer goods, automotive vehicles, parts, and engines, industrial supplies and materials, and capital goods . On the other hand, some of the major categories of goods that saw a decline in exports were industrial supplies and materials, capital goods, automotive vehicles, parts, and engines, and foods, feeds, and beverages .
U.S. Trade Partners: China Remains the Top Trading Partner
The United States trades with many countries around the world, but some are more important than others in terms of the volume and value of trade. According to the World Bank data for 2020, the top five export markets for the U.S. were Canada ($255 billion), Mexico ($212 billion), China ($135 billion), Japan ($67 billion), and Germany ($60 billion) . The top five import sources for the U.S. were China ($389 billion), Mexico ($358 billion), Canada ($299 billion), Japan ($132 billion), and Germany ($125 billion) .
China remains the top trading partner for the U.S., despite the ongoing trade tensions and tariffs between the two countries. In 2020, China accounted for 15% of U.S. imports and 9% of U.S. exports . However, the U.S.-China trade deficit also widened by 7% to $254 billion in 2020, as U.S. imports from China increased by 7% while U.S. exports to China decreased by 1% . Some of the main products that the U.S. imports from China are electrical machinery, machinery, furniture, toys, and footwear . Some of the main products that the U.S. exports to China are soybeans, aircraft, oilseeds, vehicles, and semiconductors .
U.S. Trade Outlook: Challenges and Opportunities
The U.S. trade outlook for 2023 and beyond is uncertain due to various factors that affect global trade dynamics, such as the COVID-19 pandemic, geopolitical tensions, environmental issues, technological innovations, consumer preferences, and policy changes . The U.S. faces several challenges in maintaining its competitiveness and expanding its market access in the global economy, such as addressing its trade deficits with key partners, diversifying its export portfolio, enhancing its trade infrastructure and logistics, supporting its small and medium-sized enterprises (SMEs), protecting its intellectual property rights (IPR), enforcing its trade agreements, and resolving its trade disputes .
However, the U.S. also has many opportunities to leverage its strengths and advantages in global trade, such as capitalizing on its large domestic market, fostering its innovation ecosystem, promoting its high-quality standards and regulations, advancing its digital trade agenda, engaging in multilateral cooperation and dialogue, pursuing new trade agreements with emerging markets, expanding its trade finance and assistance programs, and supporting its workers and communities affected by trade .
References:
http://www.epinet.org/Issuebriefs/203/ib203.pdf
http://assets.opencrs.com/rpts/RL34196_20071002.pdf
https://fas.org/sgp/crs/misc/IF11016.pdf
https://oec.world/en/profile/country/usa/
https://www.trade.gov/trade-data-analysis
https://wits.worldbank.org/CountryProfile/en/USA
https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china
https://www.trade.gov/trade-policy-agenda-and-annual-report
https://oec.world/en/profile/country/usa/
https://www.bea.gov/data/intl-trade-investment/international-trade-goods-and-services
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