Trade deficit in goods tops $1 trillion in 2021 for first time as U.S. gobbles up imports

[ipatent]

Trade deficit in goods tops $1 trillion in 2021 for first time as U.S. gobbles up imports

The numbers: The U.S. trade deficit in goods topped $1 trillion in 2021 for the first time ever, as an economic recovery enabled Americans to snap up a record amount of imports such as toys, cell phones and appliances.

For all of 2021, the trade gap in goods rose to $1.08 trillion from $893.5 billion in the prior year. The deficit in 2020 had also been a record high.

The deficit in goods increased 3% in December to $101 billion from $98 billion, according to an advanced government estimate. It was the biggest monthly increase on record.

Big picture: The speedy rebound in the U.S. economy compared to most other countries — fueled by massive government stimulus — helps explain the record trade deficit. Americans could afford to buy more foreign-made goods, and they did.

Demand for U.S. exports was slower to bounce back because other countries lagged behind in their economic recoveries.

 

[RedSun]

Fed printing money to hand out. Workers stay home day trade and enjoy Netflix and Disney. Where is the real economy?

 

[Clark Bruno]

I believe the real factors affecting this are a) China not abiding by its agreement made with the previous US administration to buy American goods similar in value as the goods Americans purchase from China. One can argue about the reasons for that, but that's aside the point. B) Chinese retail products virtually doubled in price when you look at various products on Amazon. The age old trick is applied that units are not sold in singles anymore for low priced items but often times you have to buy a set of 2 or 3 or 10 of whatever at inflated prices even when you only need 1. Small priced items are rarely offered in single units anymore, in fact it's hard to find many Chinese imported products that are priced in the single digit dollars. But even the remaining single items are almost twice as expensive. Some of that price increase absorbs the higher cost of transport but definitely not all of it.

Trade deficit in goods tops $1 trillion in 2021 for first time as U.S. gobbles up imports

The numbers: The U.S. trade deficit in goods topped $1 trillion in 2021 for the first time ever, as an economic recovery enabled Americans to snap up a record amount of imports such as toys, cell phones and appliances.

For all of 2021, the trade gap in goods rose to $1.08 trillion from $893.5 billion in the prior year. The deficit in 2020 had also been a record high.

The deficit in goods increased 3% in December to $101 billion from $98 billion, according to an advanced government estimate. It was the biggest monthly increase on record.

Big picture: The speedy rebound in the U.S. economy compared to most other countries — fueled by massive government stimulus — helps explain the record trade deficit. Americans could afford to buy more foreign-made goods, and they did.

Demand for U.S. exports was slower to bounce back because other countries lagged behind in their economic recoveries.

 

[ET180]

When you have 90 cargo ships waiting to undock at the LA port in California and most go back empty, you know that the trade deficit will be horrible. Why are there supply shortages? Partially because we don't make anything here anymore.

 

[HeSaidSheSaid]

the usual suspects:
1) high cost of doing business in the US
2) competition from abroad.
3) arrival of AI
4) Internet and Technologies have made business processes and production processes more efficient.
I have a hunch that the tax revenue in the US has shrunk over the years.

 

[VicBee]

When you have 90 cargo ships waiting to undock at the LA port in California and most go back empty, you know that the trade deficit will be horrible. Why are there supply shortages? Partially because we don't make anything here anymore.

We don't make things anymore because our labor costs are among the highest in the world AND the quality of our products is comparatively terrible. America can try to bully other nations into balanced trade, which goes against the fundamentals of capitalism's supply and demand, but America doesn't produce much of anything anyone wants anymore from its large manufacturing industries weighed down by union labor. Take the example of the auto industry..

 

[Clark Bruno]

That might be true but is probably quite shortsighted in regards to the current situation. The agricultural and high tech products China has a choice to order from the US is not a function of the Chinese consumer liking American products or not but it's purely a deliberate choice by the communist party to either buy from the US, Canada, Australia or the like. It is pure political opportunism and it changes its direction with every political wind change. This is not Chinese consumers buying less American products but the Chinese government playing its pieces on the board in this hour.

We don't make things anymore because our labor costs are among the highest in the world AND the quality of our products is comparatively terrible. America can try to bully other nations into balanced trade, which goes against the fundamentals of capitalism's supply and demand, but America doesn't produce much of anything anyone wants anymore from its large manufacturing industries weighed down by union labor. Take the example of the auto industry..

 

[countryBoy641]

We don't make things anymore because our labor costs are among the highest in the world AND the quality of our products is comparatively terrible. America can try to bully other nations into balanced trade, which goes against the fundamentals of capitalism's supply and demand, but America doesn't produce much of anything anyone wants anymore from its large manufacturing industries weighed down by union labor. Take the example of the auto industry..

Yes, these criticisms are accurate, but it must be acknowledged that American manufacturing was hollowed out as a result of the U.S. Dollar being the reserve currency. Back in the day of Bretton Woods, it was extremely helpful to get all these countries back to manufacturing. Dollars were valued, and aggressive countries wanted them. The fastest way to get Dollars was to export to the U.S. But since the 1970s, the U.S. has abused the situation, and now considers them "servant" countries. Which has led to the much bigger abuse, Budget Deficits and now monetization of the debt.

For most Americans, numbers larger than 6 figures are not thoughtfully discussed.
So this cratering of the American economy, and the reasons for it, has gone mostly unnoticed.

 

[VicBee]

That might be true but is probably quite shortsighted in regards to the current situation. The agricultural and high tech products China has a choice to order from the US is not a function of the Chinese consumer liking American products or not but it's purely a deliberate choice by the communist party to either buy from the US, Canada, Australia or the like. It is pure political opportunism and it changes its direction with every political wind change. This is not Chinese consumers buying less American products but the Chinese government playing its pieces on the board in this hour.

Yes, just like we decided to do the same with China's 5G equipment and phones. Political games played by all.
Last week I was asking someone about fruits from the Philippines and the person says, we have a big company, Del Monte, that sells fruits around Asia. My thought was, yup, American free trade at its best. Del Monte controls the agriculture output of at least a dozen poor countries in the world that depend on it for their existence. As most know by now, the CIA has been very active helping to remove governments that tried to challenge the behemoth corporation.
We Americans may be a little uncomfortable with that, but we're ready to go to war when China does the same. I use China as an example simply because it is the only nation that now has the capability to challenge American hegemony, and my point is simply to point to our collective hypocrisy.

 

[ET180]

Yes, just like we decided to do the same with China's 5G equipment and phones. Political games played by all.

That's not just about preference for one phone over another. Hauwei is part of the CCP as the CCP is part of every Chinese company. There is a national security risk there and the US is not alone in banning their products. For that reason, I'm surprised that TikTok has not been banned yet.