The U.S. trade deficit in goods hit a record last year, as American consumers snapped up imported products and a strong U.S. dollar weighed on export growth.
Data released Wednesday morning by the Commerce Department showed that U.S. imports of goods and services grew 6.6 percent to $4.1 trillion, as Americans bought plenty of weight-loss drugs, auto parts, computers and food from other countries.
Overall U.S. exports to the world grew to $3.19 trillion in 2024, up 3.9 percent from the previous year, as the United States sold chips, computers, aircraft and business services to the world, but fewer cars and car parts.
America’s total trade deficit in goods and services, which consists of exports minus imports, grew 17 percent to $918.4 billion.
The U.S. recorded its largest trade deficit in goods with China, at $295.4 billion, followed by the European Union, Mexico, Vietnam and then Ireland.
The trends were driven largely by the strong performance of the U.S. economy, especially compared with the rest of the world. U.S. consumers have continued to spend generously on imports. And a strong U.S. dollar has made imports seem relatively cheap for American consumers, and American exports seem relatively expensive in foreign markets.
The strong dollar, as well as competition from the Chinese auto industry, resulted in a global drop-off in U.S. car sales. Exports of automotive vehicles, parts and engines fell $10.8 billion compared with the year before, as sales of components, passenger cars, trucks and buses all dropped.
The service sector continued to fuel growth in the U.S. economy, driven by foreign spending on travel in the United States, as well as sales of American business and financial services.
The growing imports and trade deficit were partially a lingering effect of big swings in trade since the pandemic. American consumers stuck at home during the pandemic snapped up Chinese-made laptops, toys, Covid tests, athleisure, furniture and home exercise equipment.
Once consumers were sated and U.S. warehouses full, those purchases fell back in 2023, providing a spring board for higher growth in imports last year.
Brad Setser, an economist at the Council on Foreign Relations, said American pharmaceutical consumption also showed up in the trade data. Eli Lilly, the pharmaceutical giant, is manufacturing its popular weight loss drugs in Ireland and shipping them to the United States, which helped to push up the trade deficit, he said.
Trade flows could be scrambled over the next year as President Trump prepares to wage global trade wars.
On Saturday, Mr. Trump signed an executive order putting sweeping tariffs on America’s closest trading partners. He said the tariffs were aimed at pushing Canada, Mexico and China to stop flows of migrants at the border — one of his major domestic policy issues — as well as to stem shipments of deadly drugs, and offer the United States better terms when it comes to trade relationships.
Both Canada and Mexico earned slight reprieves later on Monday after Mr. Trump agreed to delay tariffs of 25 percent for a month. But an additional 10 percent tariff on all imports from China — more than $450 billion of goods — went into effect Tuesday morning, and prompted retaliation from the Chinese government.
Beijing said it would put tariffs on roughly $20 billion of U.S. exports starting next Monday, while also issuing curbs on exports of minerals and beginning an antimonopoly investigation into Google.
