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How Manufactured Goods Dominate the U.S. Trade Deficit

The United States has had many major trading partners over the decades, with annual imports and exports from them both totaling trillions of dollars.

Ever since the 1970s, the country’s imports started to overshadow exports and the U.S. trade deficit began to grow. Once the 1990s began, fueled by globalization-friendly policies around the world and cheap international goods, the trade deficit began to climb even more rapidly.

In this graphic, Ehsan Soltani uses data from the World Trade Organization to highlight the role of manufactured goods in the rising U.S. trade deficit over the last three decades.

U.S. Trade Deficit in Goods From 1990 to 2022

In 2022, the U.S. trade deficit for goods hit $1.31 trillion, consisting of more than $3 trillion in imports and offset by $2 trillion in exports. That’s a growth of 40% over a decade from a deficit $791 billion in 2012.

YearU.S. Exports
(Total)U.S. Imports
(Total)Trade Surplus/Deficit

2022$2,065B$3,376B-$1,311B

2021$1,754B$2,935B-$1,183B

2020$1,425B$2,407B-$982B

2019$1,643B$2,567B-$924B

2018$1,664B$2,614B-$950B

2017$1,546B$2,408B-$862B

2016$1,451B$2,250B-$799B

2015$1,503B$2,315B-$813B

2014$1,621B$2,413B-$792B

2013$1,580B$2,329B-$749B

2012$1,546B$2,337B-$791B

2011$1,483B$2,266B-$784B

2010$1,278B$1,969B-$691B

2009$1,056B$1,605B-$549B

2008$1,287B$2,169B-$882B

2007$1,148B$2,020B-$872B

2006$1,026B$1,918B-$892B

2005$901B$1,733B-$832B

2004$815B$1,526B-$711B

2003$725B$1,303B-$578B

2002$693B$1,200B-$507B

2001$729B$1,179B-$450B

2000$782B$1,259B-$477B

1999$696B$1,059B-$364B

1998$682B$944B-$262B

1997$689B$899B-$210B

1996$625B$822B-$197B

1995$585B$771B-$186B

1994$513B$689B-$177B

1993$465B$603B-$139B

1992$448B$554B-$106B

1991$422B$508B-$87B

1990$394B$517B-$123B

When compared to trade numbers from the early 1990s and 2000s, its clear how much U.S. trade as a whole has grown.

In 1992, the U.S. trade deficit for goods sat at only $106 billion, with imports totaling $554 billion and exports totaling $448 billion. Just a decade later by 2002, the deficit had already climbed by five times.

Manufactured Goods Trade Outshines Fuel

Analyzing the subtleties in the country’s deficit in traded goods also shows how U.S. reliance on other countries has changed over the years.

In 1990, the deficit incurred from trading manufactured goods—which doesn’t include fuel, mining production, agricultural products, or services—contributed to 69% of the total U.S. goods trade deficit.

YearU.S. Exports
(Manufactured)U.S. Imports
(Manufactured)Trade Surplus/Deficit

2022$1,196B$2,569B-$1,372B

2021$1,079B$2,256B-$1,177B

2020$915B$1,892B-$976B

2019$1,036B$1,994B-$958B

2018$1,050B$2,016B-$966B

2017$1,008B$1,872B-$864B

2016$969B$1,775B-$806B

2015$1,008B$1,811B-$803B

2014$1,052B$1,752B-$700B

2013$1,020B$1,650B-$629B

2012$1,009B$1,619B-$610B

2011$969B$1,524B-$555B

2010$872B$1,369B-$497B

2009$725B$1,122B-$397B

2008$973B$1,417B-$443B

2007$909B$1,409B-$500B

2006$829B$1,350B-$522B

2005$674B$1,238B-$564B

2004$618B$1,134B-$516B

2003$589B$990B-$401B

2002$571B$934B-$363B

2001$602B$906B-$303B

2000$646B$968B-$322B

1999$575B$843B-$268B

1998$558B$758B-$199B

1997$553B$699B-$145B

1996$485B$634B-$150B

1995$450B$608B-$158B

1994$399B$540B-$141B

1993$356B$465B-$109B

1992$340B$420B-$79B

1991$319B$380B-$61B

1990$290B$376B-$85B

Since then, despite the country exporting billions of dollars of products, the deficit caused by imported manufactured goods has only grown. In 2021, it crossed $1 trillion in deficit alone.

Part of that growth is directly tied to increasing imports from China over the 21st century. From 2001 to 2018, China’s exports to the U.S. accounted for 59% of the latter’s increasing manufacturing trade deficit, ranging in goods from electronics to machinery.

However, the U.S. managed to recover some of this deficit through surplus fuel exports, which have been increasing over the same time period.

YearFuel Exports Fuel ImportsFuel Surplus/Deficit

2022$378B$323B$56B

2021$240B$224B$16B

2020$155B$130B$25B

2019$200B$210B$-10B

2018$193B$242B$-49B

2017$139B$204B$-65B

2016$94B$163B$-69B

2015$104B$200B$-96B

2014$155B$358B$-203B

2013$149B$389B$-240B

2012$137B$433B$-295B

2011$130B$463B$-332B

2010$81B$364B$-283B

2009$55B$279B$-224B

2008$77B$502B$-425B

2007$42B$372B$-330B

2006$35B$345B$-310B

2005$27B$301B$-275B

2004$19B$217B$-198B

2003$14B$163B$-149B

2002$12B$122B$-110B

2001$13B$129B$-116B

2000$13B$140B$-126B

1999$10B$79B$-69B

1998$10B$62B$-52B

1997$13B$83B$-70B

1996$12B$77B$-65B

1995$10B$63B$-53B

1994$9B$60B$-51B

1993$10B$59B$-49B

1992$11B$59B$-47B

1991$12B$58B$-46B

1990$12B$69B$-56B

Historically the U.S. was a larger fuel consumer than producer, and was heavily affected by soaring oil prices from 2003 to the Great Recession. In 2008, the United States trade deficit in fuel hit $425 billion.

But a boom in shale oil production has seen the country rapidly increase production and exports, becoming the world’s largest crude oil producer. Despite falling oil prices, by 2020 the U.S. managed to erase its fuel trade deficit.

Will The U.S. Trade Deficit Keep Growing?

The dominance of manufactured goods in the U.S. trade deficit poses a significant challenge for policymakers and businesses.

On one hand, the country’s reliance on other countries for cheaper parts and labor has allowed its economy to benefit. But it has also become increasingly susceptible to tariffs, slowdowns in other countries, and trade wars.

While there are efforts in place to promote domestic manufacturing, such as in semiconductor chips, the effects have yet to dent the goods trade deficit.



This article was originally published by a www.visualcapitalist.com . Read the Original article here. .