The International Trade Council announces that the US trade deficit has widened to an all-time high in March, as companies relied on foreign producers to meet strong domestic demand. According to the Commerce Department, the gap in goods and services trade grew by 22.3% to $109.8 billion.
The widening of the trade deficit during the first quarter of 2022 significantly impacted the US economy, resulting in a 1.4% annual shrinkage in gross domestic product (GDP). This is attributed to the value of products imported from overseas outpacing the purchases of US goods and services by other economies. Net exports subtracted 3.2 percentage points from the first-quarter GDP.
The trade deficit is expected to face challenges in the near future, as US demand exceeds economic activity in many other nations. The ongoing Covid-19 lockdowns in China and disruptions in global supply chains further complicate the trade landscape.
In March, the value of goods and services imports rose by 10.3% to $351.5 billion, and exports increased by 5.6% to $241.7 billion, with both figures setting new records. US merchandise imports surged by 12% to a record $298.8 billion, reflecting increases in the value of industrial supplies, consumer goods, capital equipment, and automobiles.
The International Trade Council will continue to monitor and report on trade developments and their impact on the global economy.