August 2020 Data Show the Largest Monthly Trade Deficit Since August 2006
WASHINGTON, D.C. – An inflation-adjusted analysis of today’s latest Census Bureau trade data conducted by Public Citizen shows that the $424.8 billion trade deficit in the first eight months of 2020 is more than 22% higher than the $347 billion deficit during the same period in 2016.
The August 2020 monthly deficit of $67 billion is also the largest monthly deficit since August 2006, an unexpectedly large growth in the trade deficit given that the value of trade flows declined 15% overall (down $570 billion) compared to last year because of the global COVID-19 crisis.
“The overall 2020 deficit is on track to be larger than in 2016,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “The Labor Department has certified more than 200,000 more American jobs offshored since 2016, with more than $425 billion in government contracts granted to firms that offshored jobs.”
Public Citizen’s analysis of the new U.S. Census Bureau trade data also showed:
- The eight-month 2020 deficit in manufactured goods is 12% higher than in 2016.
- The August 2020 trade deficit is the largest monthly deficit since August 2006. August’s 2020 goods and services trade deficit rose from $63.4 billion in July 2020 to $67.1 billion, a 5.9% increase. Imports grew 3.17% in August relative to July, from $231.6 to $239 billion, while exports only grew 2.15%, to $171.9 billion, and remain below the $209.6 billion in February 2020 before the pandemic.
- The August 2020 monthly trade deficit in goods ($83.8 billion) is the highest on record. And the 2020 eight-month trade deficit in goods ($579.7 billion) is 7.32% higher than during same period in 2016, when it was $540.2 billion (in inflation-adjusted dollars). The U.S. trade deficit in goods decreased 3.6% in inflation-adjusted terms from $601.3 billion in the first eight months of 2019 to $579.7 billion in the same period in 2020.
- The August 2020 surplus in services trade was the smallest since January 2012, at $16.76 billion.
- The goods deficit with Mexico hit a record high of more than $16 billion in August 2020. The trade in goods deficit with North American Free Trade Agreement (NAFTA) partners is almost 19% higher in the first eight months of 2020 relative to the same period in 2016, but down 11% relative to 2019 even as Mexican exports to the U.S. began to expand significantly in June.
- The China trade-in-goods deficit is down relative to 2016, but there is a “trade diversion” effect of imports increasing from other countries.
- The 2020 eight-month trade in goods deficit with China of $194 billion is 20% smaller compared to 2016, when it was $244 billion in inflation-adjusted dollars for the January to August period. The China deficit is down more than 17% in inflation-adjusted terms from 2019, when it was $236 billion in the first eight months.
- In inflation-adjusted dollars, the goods trade deficit with the rest of the world (excluding China) increased from $365.7 billion to $385.3 billion in the first eight months of 2020 relative to the same period in 2019, a more than 5% rise.
*Data Note: Trade data is sourced from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. We present deficit figures adjusted for inflation to the base month of August 2020 and expressed the data in constant dollars, so the figures represent actual changes in the trade balances. We also offer the “nominal” figure, which is the number you will see in the U.S. Census Bureau data for figures earlier than 2020. Some economists view the nominal data as more accurately reflecting the overvalued U.S. dollar.