The United States posted its largest annual trade deficit since 2008 last year, as the global health crisis depressed export markets for U.S. companies.
The gap in trade in goods and services widened to $678.7 billion in 2020 from $576.9 billion in 2019, according to. The December deficit narrowed 3.5% from the previous month to $66.6 billion, but is wider than economists’ median estimate of $65.7 billion.
The pandemic played a key role in spoiling Donald Trump’s four-year effort to rebalance the deficit, with Covid-19 reduced demand and impacted supply chains.
The former president imposed billions of dollars in tariffs on the European Union and China, sparking a trade war that hurt U.S. manufacturing and agriculture, even as he protected some industry sectors such as steelmakers.
China regained the top spot among U.S. trading partners for goods after finishing behind Mexico and Canada in 2019. The Asian giant and the U.S. signed the first phase of a trade deal a year ago that is supposed to see China buying an additional $200 billion in U.S. goods over two years, the result of nearly three years of talks that roiled markets.
For the full year, exports fell 16%, the most in six decades of data, to $2.13 trillion, the least since 2010. Transportation exports retreated by more than a third to $56.4 billion.
Imports fell 9.5% to $2.81 trillion, the lowest value in four years.
The merchandise trade deficit for 2020 increased to $915.8 billion, the largest amount since records began in 1961, while the nation’s surplus in services fell 18% to $237.1 billion, the smallest since 2012.
Overall, the value of U.S. exports plus imports in December rose to $446.5 billion, the highest since February, but still below $469 billion at the end of 2019.