The United States is the world’s biggest goods importer making it a powerhouse in the global movement of goods.
This article was written by Avery Koop and originally published by Visual Capitalist.
With so many imports, it goes without saying that the country has a significant goods deficit with many of its trading partners. The deficit with China, for example, is $383 billion. Meanwhile, the total goods trade deficit is nearly $1.2 trillion and it increased by 9% in 2022.
Given that the country has trade relations with more than 200 countries, regions, and territories, this network of relationships is complex. This visual, using data from the U.S. Bureau of Economic Analysis, makes trade relationships easier to understand, ranking the biggest trading partners of the U.S. in terms of goods trade alongside the value of exports and imports.
A Closer Look At U.S. Trade Balances
Trade balances are characterized in two ways: deficits and surpluses.
Each balance is determined by calculating the difference in U.S. exports and imports with a given trade partner. So while the balance with Ireland is a deficit of $66.1 billion, the balance with the Netherlands is a surplus of $38.3 billion.
These are the top then:
|#1||China||$153.8 B||$536.8 B||-$382.9 B|
|#2||Mexico||$324.4 B||$454.9 B||-$130.6 B|
|#3||Vietnam||$11.4 B||$127.5 B||-$116.1 B|
|#4||Canada||$356.1 B||$437.7 B||-$81.6 B|
|#5||Germany||$72.9 B||$146.6 B||-$73.7 B|
|#6||Japan||$80.3 B||$148.3 B||-$68.0 B|
|#7||Ireland||$16.0 B||$82.0 B||-$66.1 B|
|#8||Taiwan||$43.7 B||$91.8 B||-$48.1 B|
|#9||South Korea||$71.5 B||$115.3 B||-$43.9 B|
|#10||Thailand||$15.6 B||$58.7 B||-$43.1 B|
|Total||$2.07 T||$3.25 T||-$1.18 T|
Note: Balances may not add up exactly due to rounding. Smaller trade relationships excluded on above table.
The U.S.’ largest trading partners are some of the world’s biggest exporters. ‘Made in China’ is ubiquitous for a reason. Manufacturing in places like Vietnam is playing a more essential role in the global economy, and thus the country shows up prominently on the chart above. Taiwan is also a major player due to its dominance in the semiconductor market.
Additionally, some of the most important partners are a case of proximity. Canada and Mexico are members of the USMCA agreement (which replaced NAFTA), making North America one of the world’s largest free trade zones. The U.S. dollar is typically stronger than the Canadian dollar and Mexican peso, making imports from Canada and Mexico relatively cheaper for U.S. consumers and businesses. Mexico’s lower labor costs and Canada’s petroleum surplus both play a role in trade imbalances as well.
While number one in terms of imports and services exports, the U.S. is the 2nd biggest goods exporter globally, revealed in its trade surpluses with countries like Hong Kong and the UK.
What’s Being Traded?
Without context, the chart above simply consists of large numbers. Below, we look at the actual goods moving between countries.
Overall, exports increased by 18% year-over-year. Here’s a look at some of the biggest recorded export items in 2022, alongside the dollar values:
- Crude oil: $47.5 billion
- Natural gas: $22.9 billion
- Civilian aircraft engines: $7.2 billion
- Soybeans: $7.0 billion
This list largest exports includes both commodities as well as items higher up on the economic complexity ladder, like airplane engines.
Imports increased by 15% last year. Interestingly, one of the top imports was crude oil—also one of the country’s top exports—equalling $65.1 billion. Here’s a look at the other big import items:
- Telecommunications equipment: $12.6 billion
- Pharmaceutical preparations: $18.8 billion
- Cell phones and other household goods: $11.0 billion
- Passenger cars: $19.0 billion
America’s largest imports tend to be vehicles and electronics. Non-tech goods like pharmaceuticals and furniture also rank high on the list.
The Trade Deficit Over Time
The U.S. has been at a deficit for over 40 years, so the current trend is no surprise.
While total trade (this time including both goods and services) dipped during the pandemic, the graph below reveals that trade figures are now higher than pre-pandemic levels and the overall deficit continues to increase.
Despite the trade deficit and a drop in manufacturing employment over time, U.S. industrial production has been increasing over the long term.
Notably, there have been some recent efforts to onshore manufacturing in a few key sectors.
For example, the U.S. government has stressed the importance of American-made semiconductor chips, after pandemic delays in Taiwan put major strain on a wide range of industries. The government introduced the CHIPS Act, which will help set up two semiconductor chip manufacturing hubs by 2030, among other things.