November Trade Deficit Hits 14-Year High as $85B Goods Deficit is Worst Ever
By Kenneth Rapoza, Coalition for a Prosperous America (CPA)
January 07, 2021
The November trade deficit in goods and services rose 8% to $68.1 billion November, its highest since 2006 even as the US trade deficit in goods hit $85.5 billion, its highest on record.
Our monthly goods deficit with China was only 1.9 percent up on the October figure, and our year-to-date goods deficit with China continues to be down dramatically versus 2019, showing that the Section 301 China tariffs are reducing our dependence on imports from China.
The trade deficit in goods and services hit $68.1 billion in November, a significant rise from the $63.1 billion in October as holiday seasonal demand picked up.
Our goods deficit for the first 11 months of the year reached $814.7 billion. Once December data arrives, our 2020 goods deficit is highly likely to be over $900 billion, which would make it the highest ever, beating out the 2018 figure of $872 billion and the $828 billion reached in 2006 during the early-2000s economic boom. A $900 billion goods deficit represents about 4.2 percent of US gross domestic product, in other words 4.2 percent of demand from US purchasers lost to imports.
The full story gets even worse. The data from the Bureau of Economic Analysis shows that our petroleum account flipped in 2020. In the first 11 months of 2019, we had a $14.1 billion deficit on petroleum and related goods In the corresponding period of 2020, we had a $15.7 billion surplus on the petroleum account. The non-petroleum goods deficit worsened by 7.7 percent, reaching $830.4 billion in the 2020 year-to-date period.
The monthly figures continue to be distorted by the COVID pandemic. Although factories worldwide are now largely open, shipping bottlenecks are distorting imports and exports in Asia. But the worsening trend in non-petroleum imports shows that even when COVID is completely behind us, the incoming Biden administration will have to confront a relentlessly growing goods deficit.
Looking at the bilateral trade relationships, our deficit with China is down 11.5 percent from last year to $283.57 billion year-to-date as of November.
China remains our biggest deficit nation, followed by the European Union. Our monthly trade deficit with Mexico declined by 16 percent to $10.56 billion.
November exports of goods increased $1.3 billion to $127.7 billion, but that was no where near enough to make up for imports which rose $6.4 billion on a Census basis to $214.1 billion.
China, Mexico and Newcomer Vietnam ...
Top 3 Exports & Imports ...
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