U.S. Deficit A Record $905 Billion In 2020, But, Miraculously, Trade Off Only 9%

Ruben Onsu

Former President Donald Trump waved to supporters on the route to his Mar-a-Lago estate in Florida … [+] on inauguration day, January 20. While he was president, the United States set records for total trade, total imports, total exports and total deficit. Getty Images U.S. trade totaled $3.77 trillion in […]

U.S. trade totaled $3.77 trillion in 2020, falling below $4 trillion for the first time since 2017, according to Census Bureau data released today.

While the 9% decline might not seem like good news, it is remarkable given the steep declines registered in April, May and June. In May alone, U.S. trade fell almost 30% when compared to the same month a year earlier.

U.S. trade declined $372.71 billion when compared to 2019, less than half the total of 2009. That year, trade fell by $775.41 billion, which was equal to 22.87%.

Strong import growth, particularly in the second half of the year and particularly from China, Mexico, Switzerland and Vietnam, saved what had looked, only six months earlier, like a disastrous year.

With those strong imports, the U.S. trade deficit set a record, topping $900 billion for the first time. The deficits registered in the final three years of former President Donald Trump, who railed against deficits as a candidate and while in office, are the three largest in U.S. history.

The flip side of that is that in two of those years, 2018 and 2019, the United States recorded the largest total in overall trade in U.S. history, the only two years when combined exports and imports topped $4 trillion.

It is unusual, however, to increase the deficit so substantially while overall trade decreases. The impact of that is that the percentage of U.S. trade that was an export in 2020, 37 cents on the dollar, is the lowest percentage in 12 years. It had been at 40% or above since 2008.

U.S. imports fell 6.44% to $2.34 trillion. President Trump, in his four years, oversaw the first-, second- and fourth-largest import totals.

U.S. exports fell 12.89% to $1.43 trillion. Similarly, President Trump oversaw the first-, second- and fifth-highest totals for U.S. exports.

In subsequent posts, I will take a closer look at U. S. trade by country; by airport, seaport and border crossing; and by export and import commodities. But here are a few additional highlights:

China is once again the nation’s top-ranked trade partner, followed by Mexico, whose trade fell more rapidly, and Canada. The three made up 43.09% of all U.S. trade in 2020. It was the first year since 2016 and only the third time since 2011 that no trade partner topped $600 billion in trade. China’s 2020 total was $560.10 billion, the lowest total for a top-ranked trade partner since 2010.

Vietnam and Switzerland both entered the top 10 in 2020, with Vietnam likely to stay on the strength of its two-decade growth in manufacturing might, while Switzerland is far less likely since its advancement was due to the rapid increase in gold investment and speculation.

The Port of Los Angeles was the nation’s top “port” for at least the 25th straight year but previous No. 2 Port Laredo slipped to No. 4 as Chicago’s O’Hare advance to second on the strength of Chinese imports of computers and cell phones, and New York’s JFK International advanced to No. 3 on the strength of gold imports from Switzerland. All four ranked first among all ports at least one month in 2020, a first. Most years over the last quarter century, the Port of Los Angeles has ranked first every year. Port Laredo also ranked first in 2019 for a month.

Among U.S. exports, the category dominated by aircraft and including some body parts, the nation’s top export for the seventh straight year, took a big hit, off 43.15%, almost triple the overall U.S. export average. The year marked the first since 2011 that the leading export did not top $100 billion. The 2020 total for aircraft was $71.58 billion.

It was a tough year for oil and gasoline exports, ranked second and third, with the former down 30.54% and the latter down 22.66%.

The value of soybean exports set a record in 2020, at $25.85 billion. China is the world’s largest buyer, and after injecting soybeans into the U.S.-China trade war, President Xi Jinping sharply curtailed U.S. exports initially.

On the import side, the big news is what wasn’t the top-ranked or second-ranked import: Oil. Over the last 30 years, oil has ranked first 11 years, second another 16 years and third for two year. It had never, until 2020, ranked sixth. The $76.49 billion total was the lowest total since 2001 and the first time under $100 billion in 17 years.

Motor vehicle imports ranked first followed by computer imports which topped $100 billion for the first time as home-bound workers and students raced out to be able to boot up in the confines of their homes.

Next Post

Ivanka Trump and Jared Kushner's personal income slumps more than 20%

© Provided by Daily Mail MailOnline logo Ivanka Trump and her husband Jared Kushner saw their personal income drop more than 20 percent during former President Donald Trump’s final year in office, according to a new report. Load Error The couple, dubbed ‘Javanka’, reported between $23.8 million to $120 million […]