Source: AFP
The U.S. trade deficit in 2023 narrowed to the smallest in three years, while the country imported more goods from Mexico than China for the first time in nearly 20 years, government data showed on Wednesday.
The latest numbers join a string of positive economic news for President Joe Biden, who has sought to boost sentiment about his handling of the economy as his November re-election campaign accelerates.
According to statistics from the US Department of Commerce, the overall trade gap in 2023 was $773.4 billion, down 18.7% from $951.2 billion the previous year.
In 2022, the country experienced its largest deficit in government data since 1960.
But the latest figures showed imports of manufactured goods fell more than exports, reducing the goods deficit last year.
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While purchases of goods such as crude oil and fuel oil declined, Americans also bought fewer consumer goods such as clothing and cell phones.
This was in part due to disrupted spending patterns during the coronavirus pandemic, with people spending on items like electronics while stuck at home and working remotely.
On the other hand, service exports increased last year, especially in the travel sector, and the service surplus expanded.
Consumption was surprisingly strong last year, supporting the U.S. economy, but analysts expect higher interest rates to slow consumer spending and increase import pressure.
demand slowdown
The deficit in December widened slightly from November to $62.2 billion, new data shows.
This is up from the November revised figure of $61.9 billion.
Analysts saw the report as a positive sign for global trade, as both imports and exports increased in the final month of last year.
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“The real trade deficit contributed positively to growth in the quarter,” said Matthew Martin, U.S. economist at Oxford Economics.
“Exports will continue to be strong and benefit from a weaker dollar as U.S. goods become relatively cheaper overseas,” he added, adding that net trade will continue to support gross domestic product (GDP) growth in early 2024. expected to make a positive contribution to
But Rubera Farooqui, chief U.S. economist at High Frequency Economics, said in a note that “the outlook for future trade flows is likely to be moderate.”
This is due to “the expectation that future demand and growth will slow domestically and internationally,” he said.
trade between mexico and china
Commerce Department data also shows the United States bought more goods from Mexico than China in 2023, the first time in nearly 20 years.
This comes as Washington pursues an approach it calls “friendshoring.”
The move includes diversifying U.S. supply chains across allies and partners amid growing concerns about competition with China and national security tensions between the world's two largest economies.
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And there are signs that smoldering tensions are leaving their mark.
In 2023, the value of imports from Mexico increased by $20.8 billion to $475.6 billion, while the corresponding value of imports from China decreased to $427.2 billion.
During this period, the US trade deficit with Mexico increased to $152.4 billion, while the trade deficit with China decreased to $279.4 billion.
The U.S. trade deficit with China has been a political focus of the trade war between the two countries under former President Donald Trump's administration, which imposed tariffs on Chinese goods.
The Biden administration has largely maintained the levy.
Source: AFP
