Year Begins With 5.4% Rise In Trade Deficit to $67 Billion

This year has begun like most years, a rise in the trade gap between the U.S. and the world. 

January 2024 posted a 5.4% gain in the monthly goods and services deficit, rising to $67.4 billion, the Bureau of Economic Analysis reported today. Meanwhile, the goods deficit for the month hit $91.5 billion, which is bigger than January 2023, but smaller than January 2022.

Last year’s trade deficit in goods was $1.06 trillion.  

So far this year, goods deficits were recorded, in billions of dollars, with the usual suspects, and in order: China ($22.9), European Union ($18.1), Mexico ($12.7), Vietnam ($8.5), Japan ($7.3), Germany ($6.3), Ireland ($6.0), Canada ($5.7), South Korea ($5.5), Taiwan ($4.8), Italy ($3.8), India ($3.7), Malaysia ($2.1), Switzerland ($1.5), France ($1.4), and Israel ($0.4).

The China trade deficit for January did come in smaller by about $2 billion versus the start of last year, but these numbers are increasingly harder to decipher due in large part to the de minimis rule that has made for the creation of new businesses that sell directly to American consumers duty free, often through informal entry, with very little details about the value of goods being shipped.

The U.S. is still a manufacturing exporter and not just an agricultural commodities exporter. For example, manufacturing exports shipped $101.52 billion worth of manufactured goods to the world in January, while agriculture exports came in at around $14 billion.  Agriculture is usually in surplus, but that is only thanks to a handful of items like soy and chicken. The U.S. is increasingly a net importer of food.

“The BEA has now begun publishing totals for manufactured goods exports and imports, data that was previously only available in our Domestic Market Share Index,” said CPA chief economist Jeff Ferry. “The January figures show that manufactured imports, at $218.7 billion, were 2.15 times manufactured exports in the month. The U.S. has gone from the world’s largest manufacturing nation only two decades ago, to a weak number two position, with China’s manufacturing output 2.5 times the size of our own.”

Meanwhile, the monthly goods deficit for January did rise compared to January 2023 with China offshore partner Vietnam (was $8.3 billion in Jan. 2023) and with Mexico (was $10.03 billion in Jan. 2023).

The U.S. maintained a deficit in oil and gas, coming in at around $372.5 million in January, but what may be surprising to many – the U.S. has a $1.32 billion surplus in mined minerals and ores used to feed steel mills, and for export to mineral processing facilities. 

With the year just starting for trade data, 2024 looks a lot like 2023 and the year before it in terms of top items exported and imported.