The US trade deficit ballooned by 12.2 percent in 2022 as Americans continued to buy record volumes of foreign goods. According to data from the United States Department of Census Bureau and the US Bureau of Economic Analysis, the December gap alone increased to $67.4 billion from the month prior. This brings the total shortfall to $948 billion for the year, which helped to push the trade deficit amount closer to $1 trillion. It is important to note these figures are not adjusted for price deviation.
Record import volumes reflect, at least in part, a push from retailers to replenish struggling inventories heading into the peak sales period. A big motivator for this drive was dodging the potential shortages and supply-chain issues that plagued West Coast ports the year prior. Fortunately, a strong job market and improved savings from persistent, pandemic-related government stimulus helped encourage consumer spending during that time.
But the dollar amount is not simply higher because of increased consumer spending. Whether inflation or some other factor, the value of these imports grew more than 16 percent over 2021, now approaching $4 trillion. Similarly, the value of exports for US goods and services grew by nearly 18 percent to $3 trillion.
A big contributor to US expert growth was energy shipment volumes. After Europe severed many economic ties with Russia, competition for energy drastically decreased. In addition, a somewhat surprising recovery in the US travel sector helped increased demand for fuel.
Looking ahead, though, analysts expect global trade to slow down, thanks mostly to aggressive interest rate hikes from central banks in an attempt to temper inflation. As a matter of fact, the International Monetary Fund has noted that world trade in 2023 will likely expand at its slowest pace since 2009; and, hopefully, will pick up again in 2024.
Perhaps the complicated relationship between the US and China is a factor in the slowdown. Despite the demand, imports from China have declined over the past few years, mostly because of trade restrictions like tariffs. Still, the overall US-China trade volume deficit hit a new record in 2022, even though the $382.9 billion US-China trade deficit did not. w
