America's deficit in the year before "Operation Iraqi Freedom" invasion started on March 20, 2003 rose 64% to $767.5 billion in 2005 from $468.3 billion in 2002.
The good news is that the United States exported US$906 billion worth of goods & services to the rest of the world in 2005, up about 31% from $693.1 billion in 2002.
However, money outflows from U.S. to pay for imports increased at a faster rate over the same period, up 44% to $1.67 trillion from $1.16 trillion. In 2002 U.S. imports were already a much higher number than exports, giving the higher percentage growth rate for imports even more impact on America's growing deficit.
The lists below show the trading nations that bought the most American exports, sold the most imports to the U.S. and enjoyed the highest trade surpluses at Uncle Sam's expense.
Top 10 Countries for U.S. Exports (2005)
- Canada ... US$211.9 billion (up 31.7% from 2002)
- Mexico ... $120.4 billion (up 23.5%)
- Japan ... $55.5 billion (up 7.8%)
- China ... $41.9 billion (up 89.6%)
- United Kingdom ...$38.6 billion (up 16.3%)
- Germany ... $34.2 billion (up 28.6%)
- South Korea ... $27.8 billion (up 23%)
- Netherlands ... $26.5 billion (up 44.8%)
- France ... $22.4 billion (up 17.9%)
- Taiwan ... $22.1 billion (up 20.1%)
The top 4 trade partners for American exports - Canada, Mexico, Japan and China - consumed over 47% of U.S. exports in 2005.
Top 10 Countries U.S. Imports From (2005)
- Canada ... US$290.4 billion (up 38.9% from 2002)
- China ... $243.5 billion (up 94.5%)
- Mexico ... $170.1 billion (up 26.4%)
- Japan ... $138 billion (up 13.7%)
- Germany ...$84.8 billion (up 35.7%)
- United Kingdom ... $51 billion (up 25.3%)
- South Korea ... $43.8 billion (up 23%)
- Taiwan ... $34.8 billion (up 8.4%)
- Venezuela ... $34 billion (up 125.2%)
- France ... $33.8 billion (up 19.9%)
Canada, China, Japan and Mexico supplied more than half of U.S. imports in 2005. Oil-producer Venezuela showed the highest percentage gain in its exports to the U.S. However, China's exports to the U.S. almost doubled since 2002, and account for a much higher share of world exports to the U.S. when compared to the smaller number for Venezuelan exports.
And The Winners Are...
The top 4 nations in the list below were responsible for some 54% of America's total deficit in 2005.
Top 10 Countries Contributing to U.S. Trade Deficit (2005)
- China ... -$201.5 billion (up 95.4% from 2002)
- Japan ... -$82.5 billion (up 17.9%)
- Canada ... -$78.5 billion (up 62.9%)
- Germany ... -$50.6 billion (up 40.9%)
- Mexico ... -$49.7 billion (up 33.6%)
- Venezuela ... -$27.6 billion (up 157.9%)
- Malaysia ... -$23.2 billion (up 69.3%)
- Nigeria ... -$22.6 billion (up 361.2%)
- Saudi Arabia ... -$20.4 billion (up 142.9%)
- Italy ... -$19.5 billion (up 37.3%)
With its formidable growth rate in its low-cost exports, China alone generated over a quarter of the U.S. deficit in 2005 (up from 22% of the deficit in 2002). The above list also shows the effects of higher oil prices since the Iraqi invasion, with oil-nations Venezuela, Nigeria and Saudi Arabia accounting for almost 10% of Uncle Sam's trade imbalance in 2005.
So how can the U.S. get back on the track for surpluses in international trade?
Increases in the exchange rate for the Chinese yen would make imports from China more expensive, slow American purchases of Chinese goods and make U.S. products more competitive at home and globally. Lower oil prices and alternative energy sources would also reduce what America pays for foreign fuel imports.
According to the traditional political script, American productivity increases can improve global competitiveness by increasing U.S. exports.
Yet perhaps the most prevalent trend in international trade is globalization. Specifically, American companies like McDonald's, Starbucks, Wal-Mart and Microsoft are expanding into high-growth countries around the world in their quests to boost cash inflows into the pockets of American companies while U.S. jobs are outsourced to the host nations.
See also Made in America Trade Advantages and America's Top Imports & Exports 2008.
Sources for this Article
www.census.gov/foreign-trade/Press-Release for 2002 & 2005
