Despite Tariffs, U.S. Trade Deficit in Goods Reaches All-Time High

Despite tariff measures and the disruption of the COVID-19 pandemic, the U.S. trade deficit in goods rose to a record $84.8 billion for the month of November, up 5.5 percent over the same period last year. Goods imports were up by nearly six percent in November compared with a year earlier, and exports fell by more than six percent year-on-year. 

American consumer spending on goods has spiked in recent months, despite the disruption of the COVID-19 pandemic. In the third quarter, American consumers and businesses spent about $200 billion (13 percent) more on durable goods - including imported durable goods - than they did in the same period in 2019. The jump was due to a drawdown on savings from the first two quarters, when caution prevailed due to the pandemic, and to lower spending on services, according to analysts with Deloitte. 

Imports of capital goods and industrial supplies also rose in the third quarter, representing additional import spending by American manufacturers. 

The import surge has been plainly visible at major American seaports like the Los Angeles / Long Beach complex, where massive quantities of import cargo arrived in waves in the months leading up to the holiday season. The rush was driven in part by retailers' efforts to restock after the severe slowdown seen in the first half of the year, as well as consumer durables spending.

Outbound cargoes have not balanced out this import surge: With ex-China freight rates hitting sky-high levels, ocean carriers have been expediting the return of empty boxes to Asian markets as quickly as possible - often without waiting to refill them with American exports. Ocean carrier Hapag-Lloyd made this policy explicit for agricultural cargoes from U.S. inland producers, who now lack access to the company's containers.