WASHINGTON D.C.: The Commerce Department said the U.S. trade deficit increased to a record high $859.1 billion last year, compared to $676.7 billion in 2020, up 27 percent.
“The U.S. trade picture will not return to normal until the pandemic purchases start to slow and life returns to what it was,” said Christopher Rupkey, chief economist at FWDBONDS in New York, as quoted by CNBC.
The trade gap accounted for 3.7 percent of gross domestic product, up from 3.2 percent in 2020, while the economy grew 5.7 percent in 2021, the highest rate since 1984, after the U.S. government provided nearly $6 trillion in pandemic relief which encouraged consumer spending.
Last year, the goods deficit shot up 18.3 percent to a record $1.1 trillion, while imports of goods reached a record high of $1.8 trillion, driven by imports of industrial supplies and materials, which increased to their highest level since 2014.
Meanwhile, food imports were the highest on record, along with capital, consumer and other goods, and there were record imports from 70 countries in 2021, led by Mexico, Canada and Germany.
Strong import growth overshadowed a sharp rebound in exports, with exports of goods surging 23.3 percent to a record $1.8 trillion. Exports of industrial supplies and materials, foods, consumer goods, other goods and petroleum were also at their highest on record.
Last year, the U.S. exported record amounts to 57 countries, led by Mexico, which increased to a total value of $276.5 billion. Shipments to China rose to $151.1 billion, and exports to South Korea increased to $65.8 billion.
The final boost to the trade deficit came from a 1.8 percent increase to $80.7 billion in December, while economists polled by Reuters predicted a deficit of $83.0 billion.
