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Annual Trade Deficit Sees First Drop in Six Years Despite December Increase

Tuesday, February 11, 2020
Sandler, Travis & Rosenberg Trade Report

The U.S. trade deficit in goods and services jumped 13.5 percent in December but fell 1.7 percent in 2019, according to trade statistics released Feb. 6 by the Department of Commerce. The decline in the annual deficit was the first since 2013 after two years of record highs.

The U.S. deficit with China declined for the first time in three years in 2019 as both imports and exports plummeted in response to the tariffs President Trump has imposed on Chinese goods and Beijing’s retaliatory tariffs on U.S. products. However, deficits with the other 14 countries with which the U.S. has the largest deficits all increased, half of them by more than ten percent. Deficits with at least two major trading partners – the European Union and Mexico – rose to record highs.

Monthly statistics. The monthly trade deficit in goods and services was $48.9 billion in December 2019, up from $43.1 billion in November. Exports were up 0.8 percent to $209.6 billion while imports rose 2.7 percent to $258.5 billion.

The deficit in goods trade increased 7.9 percent in December to $69.7 billion. Imports of goods rose 3.2 percent to $207.5 billion, including increases of $1.7 billion in crude oil, $900 million in non-monetary gold, and $600 million in other petroleum products. Exports of goods gained 1.0 percent to $137.7 billion, including an increase of $1.5 billion in crude oil along with a $1.0 billion decrease in automotive vehicles, parts, and engines.

The services surplus was down 0.5 percent to $20.8 billion, with imports up 0.8 percent to $51.1 billion and exports up 0.4 percent to $71.9 billion.

Country/region

Deficit

% Change

Surplus

% Change

China

$25.7 billion

+0.4

   

European Union

$14.0 billion

+3.7

   

Mexico

$9.4 billion

+10.6

   

Germany

$5.5 billion

+5.8

Japan

$4.4 billion

-22.8

   

Canada

$4.4 billion

+158.8

   

Italy

$2.9 billion

+26.1

Taiwan

$2.4 billion

+41.2

   

South Korea

$1.9 billion

+58.3

   

India

$1.7 billion

-29.2

   

France

$0.3 billion

-75.0

   

South/Central America

   

$4.6 billion

-6.1

Hong Kong

   

$1.9 billion

+5.6

Brazil

   

$0.9 billion

-47.1

United Kingdom

   

$0.6 billion

-53.8

Singapore

   

$0.5 billion

-16.7

Saudi Arabia

   

$0.3 billion

+200

Annual statistics. For all of 2019 the U.S. trade deficit totaled $616.8 billion, down 1.7 percent from 2018. Exports slipped $1.5 billion to $2.50 trillion and imports dropped $12.5 billion to $3.12 trillion. Both were the first such declines since 2016.

The goods deficit fell 2.4 percent to $866.0 billion a year after hitting an all-time high. Exports were down $21.3 billion to $1.65 trillion, including decreases of $12.6 billion in civilian aircraft, $7.6 billion in other petroleum products, and $5.1 billion in other goods. Imports fell $42.6 billion to $2.52 trillion, including decreases of $30.3 billion in crude oil, $11.6 billion each in computer accessories and telecommunications equipment, and $4.1 billion in gem diamonds along with increases of $16.0 billion in pharmaceutical preparations and $4.5 billion in civilian aircraft engines.

The services surplus fell 4.0 percent to $249.2 billion. Exports increased $19.7 billion to $846.7 billion while imports rose $30.2 billion to $597.5 billion.

The goods and services deficit was 2.9 percent of gross domestic product in 2019, down from 3.0 percent in 2018.

Country/region

Deficit

% Change

Surplus

% Change

China

$345.6 billion

-17.6

   

European Union

$177.9 billion

+5.1

   

Mexico

$101.8 billion

+24.9

   

Japan

$69.0 billion

+2.1

Germany

$67.2 billion

+1.6

   

Ireland

$52.7 billion

+12.6

   

Italy

$33.4 billion

+5.7

   

Malaysia

$27.4 billion

+3.4

   

Canada

$27.0 billion

+36.4

   

Switzerland

$26.7 billion

+41.3

India

$23.3 billion

+9.4

   

Taiwan

$23.0 billion

+48.4

   

South Korea

$20.6 billion

+15.1

Thailand

$20.2 billion

+4.7

   

France

$19.7 billion

+21.6

   

Indonesia

$12.4 billion

-1.6

   

South & Central America

   

$53.7 billion

+29.4

Hong Kong

   

$26.1 billion

-16.7

Netherlands

   

$21.5 billion

-13.3

Australia

   

$15.2 billion

0

Belgium

   

$14.6 billion

+2.8

Brazil

$12.2 billion

n/a

United Kingdom

$6.0 billion

n/a

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