US Trade Deficit Surpasses 1,000 Trillion Won Last Year... Records All-Time High

COVID-19 Stimulus Funds Boost Revenue
Trade Deficit Hits $355.3 Billion... Nears Record High

[Image source=AP Yonhap News]

[Asia Economy Reporter Lee Hyun-woo] The United States' trade deficit last year exceeded 1,000 trillion Korean won, marking the largest scale ever recorded. This is attributed to the massive funds released into the market through COVID-19 economic stimulus measures, which led to increased consumption of imported goods, as well as the impact of soaring energy and raw material prices.

On the 8th (local time), the U.S. Department of Commerce announced that the annual trade deficit in goods and services for the United States last year surged 26.9% year-on-year to $859.1 billion (approximately 1,029.6 trillion Korean won). Both imports and exports reached record highs last year, but the increase in imports was more pronounced.

The scale of U.S. imports last year rose 20.5% from the previous year to $3.39 trillion. Exports also increased by 18.5% to $2.53 trillion, setting a record high, but the growth was smaller compared to imports. CNBC analyzed, "More than $6 trillion of massive funds were released into the market through COVID-19 stimulus packages, but due to quarantine policies making dining out, travel, and service use difficult, most consumption shifted to imported consumer goods such as mobile phones, home appliances, and furniture."

Accordingly, the trade deficit with China, the world's largest consumer goods producer, also increased significantly. Last year, the U.S. trade deficit with China was $355.3 billion, up $45 billion, or about 15%, from the previous year. This figure is close to the record high U.S.-China trade deficit of $375.2 billion recorded in 2017.

The surge in import prices for energy and raw materials following the COVID-19 impact is also analyzed as a cause of the worsening trade deficit. According to MarketWatch, the average U.S. crude oil import price last year was $60.40 per barrel, a 65% increase from $36.66 per barrel in 2020.

This content was produced with the assistance of AI translation services.