US trade deficit will rise to a new record high of $948 billion in 2022
Washington The chronic deficit in the US trade balance rose to a new record high last year. Imports exceeded exports by more than $948 billion, the Commerce Department said in Washington on Tuesday.
2021 imported the USA $845 billion more in goods and services than they exported. The deficit in trade with China alone amounted to $382.9 billion in 2022 – an increase of $29.4 billion from the previous year. The trade deficit with the EU was $203.9 billion, of which Germany accounted for $73.7 billion.
The gigantic trade deficit shows that the USA is living above its means economically – i.e. consuming significantly more than it produces. However, this gap is filled by foreign capital imports, since the USA as a location is also in great demand among investors because of the US dollar as the key currency.
Former US President donald trump has repeatedly interpreted the traditionally high deficit as a sign that his country is being ripped off by other countries – and has therefore started trade conflicts, for example with China.
The People’s Republic has now tightened the tone in the trade dispute with the USA that has been smoldering for years. At a meeting of the World Trade Organization (WTO) on controversial issues, the representative of the People’s Republic recently called the trade rival a “ruffian” and “rule breaker”.
IRA creates tension
The Chinese envoy’s statements to the WTO, Li Cheggang, were apparently a reaction to a recent move by President Joe Biden’s US administration. These had objected to a recently made WTO-Ruling finding the US in breach of international rules over tariffs on steel and aluminum imposed under the Trump presidency.
The transatlantic trade relations are not free of tension either. The so-called Inflation Reduction Act (IRA) is causing resentment in the EU. This subsidy package to promote climate-friendly technologies favors companies that produce in North America – which has alarmed the EU. The IRA is primarily aimed at China, which could lead to new trade disputes around the world.