[Asia Economy New York=Special Correspondent Joselgina] Last year, the United States' trade deficit once again broke the record for the largest ever. Amid ongoing US-China hegemony conflicts, the trade deficit with China expanded to its largest level in four years.
According to the US Department of Commerce on the 7th (local time), the US annual trade deficit in goods and services for 2022 was $948.1 billion (approximately 1,197 trillion won), an increase of 12.2% compared to the previous year. This surpassed the record for the largest trade deficit set in 2021 within just one year. Exports ($3.097 trillion) increased by 17.7% compared to the previous year. Imports were recorded at $3.9578 trillion, up 16.3%.
The New York Times (NYT) reported that "the annual trade deficit approached $1 trillion," adding that "the expansion of imports is evidence that economic recovery continues following the COVID-19 pandemic." It explained that during the recovery phase from COVID-19, demand surged sharply and companies focused on securing inventory, leading to a significant increase in goods imports. It was also analyzed that sharp inflation and the surge in energy prices due to Russia's invasion of Ukraine contributed to the expansion of the trade deficit. The strong dollar weakened the price competitiveness of US export products, further exacerbating the trade deficit.
In particular, more than one-third of the annual trade deficit occurred in trade with China. Last year, the trade deficit with China was $382.9 billion (approximately 481 trillion won), marking the largest in four years. This amount increased by $29.4 billion (8.3%) compared to one year ago and is the second-largest ever recorded. Over the past year, the amount the US imported from China increased by $31.8 billion to $536.8 billion, while exports increased by only $2.4 billion to $153.8 billion. Politico evaluated this as "a remarkable trade volume considering the tariffs on China and new trade sanctions that have continued for several years."
The US also ran a trade deficit of $43.9 billion with South Korea. The trade deficit with the European Union (EU) was $203.9 billion, which decreased compared to the previous year. Local media assessed that after the Ukraine war, the EU severed relations with Russia and imported more energy products from the US, leading to a reduction in the trade deficit with the EU.
On a monthly basis, the US trade deficit in December last year was $67.4 billion, a 10.5% increase compared to the previous month. Imports rose 1.3% to $317.6 billion, while exports fell 0.9% to $250.2 billion, marking the lowest level in 10 months. Exports appeared to decline due to global demand slowdown and a decrease in crude oil export revenue following year-end oil price drops. Major foreign media reported that this export slowdown has been observed recently not only in the US but also globally in China, the EU, and other regions.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
