The 2020 U.S. Importer chart provides a detailed look at a chaotic year in international trade – a year marked by the COVID-19 crisis and political and economic upheaval.
It might be said that the 2020 U.S. Top 100 Importers chart is a reflection of U.S. trade (see page 12). Contained within the individual numbers is a year like no other – COVID-19, BREXIT and a dramatic shift in US administrations weaved into the fabric of a chaotic year in trade.
For many, 2020 will be remembered as a singularly bad year in all aspects. From an economic perspective, the GDP really tells the story better than unemployment figures or trade numbers – for the full year the U.S. GDP declined 3.5% – it was the worst year for the U.S. since the end of World War II. Even the 4% increase in GDP in December wasn’t enough to lift the moribund U.S. economy.
No doubt, COVID-19 was the dominant factor. More than any economic depression, the COVID pandemic influenced how things got done and the pattern of day-to-day life. And for U.S. trade, particularly on the import side, the changes were readily apparent. Home deliveries became the norm – it seemed Amazon delivery trucks were now stopping in every nook and cranny in the country, dropping off packages on backroads, country lanes and downtown Manhattan.
As countries like China and others in Southeast Asia recovered, exports to the U.S. began to soar – particularly in the fourth quarter, as reflected in the jump in GDP.
The trade deficit – the difference between exports and imports – has continued to rise, although the gap in goods narrowed to $82.5 billion in December 2020 from $85.5 billion in November. Nonetheless, under the Trump Administration’s tariff wars – designed in large part to reduce the U.S. trade deficit – the country posted three of the largest trade deficit years in the nation’s history. For 2020, the final trade deficit numbers are expected to be around $900 billion, eclipsing $878.68 billion posted in 2018. Total trade is expected to be just under $4 trillion for the year– well below the tally in 2018.
There are a number of interrelated reasons for the gap such as a strengthening dollar, which effectively makes imports cheaper and exports more expensive, which was also exacerbated by countervailing tariffs placed on U.S. exports. In terms of the US economy, the service industry – hotels, restaurants, travel and brick-and-mortar retailers, large and small, have been decimated by COVID-19 related health restrictions (see Peter Buxbaum’s Retail 2021: It’s all about distribution article).
How much impact the trade deficit actually has on the economy is subject to debate. For example, to manufacture a smart phone or an automobile requires imported parts from a number of countries to assemble the finished product for export. Thus dividing up the “benefits” to each party in the economic chain is not always clear cut. This is…
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