For the first time in history, America’s trade deficit has soared past $1 trillion. The trade deficit came in at $1.08 trillion for 2021, topping the previous record set in 2020 at $893.5 billion.
The Biden Administration has been touting claims of the US economic recovery after the COVID-19 pandemic. However, Americans’ surging demand for consumer goods has led to higher imports. Domestic production lags as manufacturers face supply chain shortages and an ongoing labor supply crisis.
Last month, total imports into the US went up by 2 percent to a new record of $258.3 billion. Imports were led by consumer goods, with capital production equipment and motor vehicles increasing for the month. The total value of exports was $157.3 billion, leading to a new monthly record deficit of more than $100 billion.
Some economists point to the enormous trade deficit indicating that the surging inflation hammering American consumers is not a direct result of supply shortages as much as from the incredible increases in the money supply created by skyrocketing federal spending. Peter Schiff observed this week that actual needs will come “after the dollar crashes.”
Market Watch opined that international demand for goods exported by US producers has been slow because other countries have not “recovered” economically from COVID as rapidly as the US has. The outlet also said that it expects the trade deficit to decline as “other countries catch up.”
Biden addressed the trade deficit, at least indirectly, during his two-hour press conference last week. He sought credit for “fixing” supply chain disruptions attributed to the pandemic. Biden hand-waved the empty grocery shelves he said he saw “being shown on television,” claiming that shelves are “89 percent full” and only slightly below pre-pandemic levels.
Despite Biden’s claims, many industries still report significant supply chain problems. In particular, the auto industry says that new auto sales last year came in at 2 million fewer units than before the pandemic.