By Naveen Athrappully
Contributing Writer
America’s trade deficit widened in November to more than $100 billion, with import growth outstripping the uptick in exports, according to data released by the government.
The trade deficit for November is estimated to be $102.9 billion, up by 4.7% from $98.3 billion in October, according to a Dec. 27 statement from the U.S. Census Bureau. Imports totaled $279.2 billion, 1.58 times higher than exports, which registered $176.4 billion.
Exported foods, capital goods, industrial supplies, consumer goods, and automotive vehicles registered positive growth from the previous month on a seasonally adjusted basis. Automotive vehicles saw the biggest gain at 15.8%.
As for imports, all the above-mentioned categories grew, driven by a jump in foods, feeds, beverages and industrial supplies.
While both imports and exports were higher than in October, growth in imports was larger in dollar terms.
Data released last month showed the total trade deficit in the first 10 months of the year to be 12% higher than in 2023.
The countries that the United States has the largest trade deficits with are China, Mexico, Vietnam, Ireland and Germany.
Meanwhile, the United States enjoys large trade surpluses with the Netherlands, Hong Kong, the United Arab Emirates, Australia and the UK.
Trade deficits are problematic for any economy, as domestic consumers spend more on foreign products than domestic businesses sell abroad. This negatively impacts the GDP growth rate.
According to research organization The Conference Board, while the United States is expected to end 2024 on a strong footing, “myriad uncertainties loom over 2025.” This suggests “somewhat slower economic activity next year and material two-sided risks.”
The organization estimates GDP growth to be 2.7% year over year in 2024, which is calculated to fall to 2% in 2025, and move further down to 1.8% in 2026.
Sen. John Boozman, R-Arizona, has raised concerns about the United States’ agriculture sector.
The U.S. Department of Agriculture is predicting “a record negative agriculture trade deficit for fiscal year 2025,” according to an Aug. 28 statement from Boozman’s office.
The agricultural trade deficit for fiscal year 2025 is expected to grow from “a previous record of negative $30.5 billion in FY 2024 to a new record of negative $42.5 billion,” the statement said. U.S. agricultural exports are calculated to be at $169.5 billion, the lowest level since fiscal year 2020.
Trump’s Tariffs
President-elect Donald Trump has said he will impose tariffs on foreign goods. The tariff hike was proposed to boost the country’s economy and revitalize domestic manufacturing.
The Congressional Budget Office recently calculated how a 60% tariff on Chinese imports and a 10% tariff on other imports would affect the U.S. economy.
The agency estimated that such a move would cut the government’s budget deficit by $2.7 trillion between 2025 and 2034.
However, the tariffs “would make consumer goods and capital goods more expensive, thereby reducing the purchasing power of U.S. consumers and businesses,” the agency stated.
In addition, tariffs “would increase businesses’ uncertainty about future barriers to trade and would reduce returns on new investments, especially for businesses that use imported goods in their production process,” it stated.
Trump has proposed a 25% tariff on all goods imported from Canada and Mexico, citing their failure to deal with the flow of drugs and illegal immigrants into the United States.
He has proposed a 60% tariff on Chinese goods. During his first term in office, Trump hit China with tariffs after a probe by the U.S. trade representative discovered that the Chinese communist regime was directly involved in illegal practices such as intellectual property theft while offering excessive subsidies to Chinese companies.
More recently, Trump warned the European Union to buy more U.S. oil and gas to cover the trade deficit the United States has with the region.
Last year, the United States imported around $552.5 billion in goods from the EU while exporting only $381.2 billion to the union, a deficit of $171.3 billion.
