US Trade Deficit Approaches $1 Trillion In 2021, Reaching Record Highs

The U.S. trade deficit approached $1 trillion in 2021 as Americans imported more goods and services despite the ongoing supply chain snarls created by the COVID-19 pandemic.

The Commerce Department on Tuesday released its latest statistics that showed the goods and services deficit leapt 27% to reach $859.1 billion, up from $678.7 billion in 2020, with imports sprinting ahead of exports.

Imports of consumer and capital goods as well as automotive goods each rose at nearly double the rate of exports. Imports of consumer goods increased by $5.2 billion versus only $1.2 billion in consumer goods exports.

Trade in goods with China increased $6 billion to $34.1 billion in December as exports decreased $2.2 billion to $11.8 billion and imports increased $3.8 billion to $45.9 billion.

President Joe Biden has not significantly altered former President Donald Trump’s more hawkish approach to trade policy with China. U.S. Trade Representative Katherine Tai has held that the tariffs and restrictions imposed during the Trump administration can be used as bargaining chips in negotiations with China.

However, a number of business groups have criticized the Biden administration for failing to lay out a China strategy, arguing that sticking to the Trump-era approach has hurt commerce and leaves a number of firms in a state of uncertainty.