The Trade Deficit Is Expanding
The US trade balance can be calculated many ways, with the broadest measure consisting of exports minus imports of goods, services, and income receipts. When including all three of these categories of imports and exports, the US has run a trade deficit annually since 1992 (Fig. 33). In 2018, the US ran a trade deficit of $488.5 billion. Adjusted for inflation, this is the largest trade deficit since 2011. This deficit is primarily due to the US importing more goods than it exports, although the nation is a net exporter of services.
The United States' largest trade relationships (calculated as exports plus imports) are with Canada ($861 billion), China ($802 billion), Mexico ($728 billion), the UK ($499 billion), and Japan ($440 billion) (Fig. 34). Of those five, the US runs a trade deficit with China, Mexico, and Japan, while running a surplus with Canada and the UK. Our trade deficit with China has increased by 203% since 2003 and 12.6% in 2017 to reach a high of $401.1 billion in 2018.