According to the World Integrated Trade Solution, United States is theworld's second-largest importer.It imported $3.1 trillion in 2019. That includes$2.5 trillion in goods and $597 billion in services.
Top U.S. Imports
The largest U.S. import category is capital goods at $678billion. Businesses import $131 billion in computers and related equipment. They also import$117 billion in telecommunications and semiconductors.
The consumer goods category is almostas large at $654billion. Most of this is pharmaceuticals ($149 billion) and cell phones/TVs ($132 billion). Next is apparel and footwear ($130 billion).
U.S. manufacturers import $522billion of industrial supplies. Of this, $191 billion is oil and petroleum products. The U.S. alsoimports $376 billion worth of automobilesand $151 billion in food and feedstock.
Services is a large and growing category. In 2019, U.S. service imports totaled $588 billion. Almost half was travel and transportation services at $262 billion. The next was computer services and other business services at $161 billion. Finance and insurance services were $84 billion. The government services category was $24 billion.
More than half of U.S. imports come from five countries: China, Canada, Mexico, Japan,and Germany.These imports continue to rise despite President Donald Trump's trade war.
Key Takeaways
- As the world’s second-largest importer, the United States is burdened with a huge trade deficit.
- Although the United States is capable of manufacturing almost all of its imports, it gets much better prices when buying from other countries.
- President Trump imposed higher tariffs on U.S. trading partners such as China and Canada in an effort to lower the U.S. trade deficit.
- The U.S. economy’s reliance on imports has caused large losses in American jobs, especially in manufacturing.
Blame Imports for the Trade Deficit
The United States importsmore than it exports.According to the U.S. Census, that createsa tradedeficit of $485 billion.Even thoughAmerica exports billions in oil, consumer goods, and automotive products, it imports even more of those same categories.
Low-Cost Imports Cost U.S. Jobs
Obviously, everything that is imported is not made in America.For that reason, a trade deficit increases U.S. unemployment.
The biggest change occurred with the growth of imports from China. In 2007, 28%of all imports were from China and other low-income countries. This was a dramatic rise from 2000 when this value was only 15%.
At the same time, the United States was losingmanufacturing jobsaccording to astudy in the American Economic Review. Itfound that in 2000, more than 10% of the labor force worked inmanufacturing.By 2007, it had dropped to 8.7%. Not all of those losses were fromoutsourcing. Some were from the rise in robotics.
Thestudy also found that joblosses hit some communities harderthan others. The cities and towns that lost out to Chinese competition also experienced higher costs for unemployment compensation, disability payments, health care, and early retirement.A study by Illinois Wesleyan Universityshowed that$1billion in imports from Chinareduced U.S. manufacturing by 0.48%.
At the same time, imports do create U.S. jobs in transportation, distribution, and marketing. For example, the Heritage Foundation estimated that imports from Chinacreated 500,000 of these jobs. Butit's unlikely that these job gains offset the job losses in manufacturing.
Why America Imports So Much
Although America canproduce all it needs, China, Mexico,and otheremerging market countriescan produce it for less. Their cost of living is lower, which allows them to pay their workers less. Thus, they are better at producing what U.S. consumers want than American companies could. This is called the "theory ofcomparative advantage."
For example, Indian technology companies can pay their workers just $7,000 a year, much lower than the U.S. minimum wage. In other words, there's a trade-off between plentiful U.S. jobs and low-cost products. That's just one of thewaysIT outsourcing affects the economy.
Many people say we should only buy items that are "Made in America." That would solve the problem only if everyone were willing to pay higher prices.
During his time in office, President Trump explored ways to force Americans to make this trade-off. He slapped tariffs on imports from various countries, includingChina. He pulled the United States out of the Trans-Pacific Partnership and the North American Free Trade Agreement (NAFTA).
Trump's renegotiation of NAFTA—known as the U.S.-Mexico-Canada Agreement on trade (USMCA)—took effect July 2020. Time will tell whether the renegotiated NAFTA has a significant impact on imports, cost of goods, or any other economic factors.
How the U.S. Imports Are Part ofthe Balance of Payments
Balance of Payments
- Current Account
- Current Account Deficit
- U.S. Current Account Deficit
- Trade Balance
- ImportsandExports
- U.S. Imports and Exports Summary
- U.S. Imports
U.S. Imports by Year for Top 5 Countries
- U.S. Imports
- U.S. Exports
- Trade Deficit
- U.S. Trade Deficit
- U.S. Trade Deficit by Country
- U.S. Trade Deficit With China
- Capital Account
- Financial Account
