America’s annual trade deficit—the amount by which imports are greater than exports—jumped 27% in 2021 to a new record, $859.1 billion, the government reported Feb. 8. Exports rose 18.5%, but imports rose even more—37.3%.
The total trade deficit includes both goods and services, and the goods deficit—which topped $1 trillion for the first time—explained most of the overall deficit increase. The biggest goods deficits were with China ($355 billion) and the European Union ($219.6 billion).
The balance of trade in services, on the other hand, has long been in surplus, but that dropped 5.6% last year to $231.5 billion. Much of the jump can be explained by the pandemic: Americans shifted spending from local restaurants and concerts to foreign-made toys and electronics, and foreign tourist spending dropped big-time.
The United States hasn’t had an overall trade surplus since 1975.
