U.S. President Donald Trump ordered an investigation into unfair and unbalanced trade with the United States as part of the America First Trade Policy memorandum signed Monday.
From January through November 2024, the United States ran its largest deficits in goods trade with China, Mexico and Vietnam, according to Commerce Department data.
Unfair and unbalanced trade
In the memo, Trump directed the Secretary of Commerce, in consultation with the Secretary of the Treasury and the Trade Representative, to investigate the causes of large and persistent annual U.S. goods trade deficits.
He also directed the same officials to investigate the economic and national security implications and risks resulting from those deficits, and for them to recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy the deficits.
The following are some of the major U.S. trade deficits in its trade in goods during the first 11 months of 2024, in millions of dollars:
- China: -270,421.
- Mexico: -157,205.
- Vietnam: -113,103.
- Ireland: -80,509.
- Germany: -76,385.
- Japan: -62,583.
- South Korea: -60,216.
- Canada: -54,380.
- India: -41,481.
Trade Integration
The U.S. merchandise trade deficit measures the net difference between exports and imports of goods. This indicator is part of the overall balance of payments. In addition, there is a broader measure that assesses the overall economic participation of the United States: the current account. This includes not only trade in goods, but also services and certain income flows.
But another way to measure the U.S. trade deficit related to some extent to the degree of U.S. integration is to divide this deficit by its exports to each respective economy.
For example, if the United States has a trade deficit with Mexico of $157.205 billion and U.S. exports to the Mexican market were $309.421 billion, the result is 50.8 percent.
Below are the results of the same ratio, broken down for each of the above economies, in percentage:
- Vietnam: 966.9.
- Ireland: 526.1
- China: 117.1.
- India: 107.3
- South Korea: 99.9.
- Japan: 85.5.
- Mexico: 50.8.
- Canada: 16.9.
- Germany: 8.6.