Over the last several years the trade pendulum has continued to swing toward a deeper deficit for the United States, and that trend continued in May, according to data released by the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA).
Amid the growing trade deficit and pandemic-related challenges, a group of Republican senators sent a letter to President Joe Biden, urging him to end the trade war initiated three years ago by his predecessor, Donald Trump. According to his website, Sen. Ron Johnson, a Wisconsin Republican, was joined by five colleagues, including Sens. Thom Tillis (R-N.C.), Pat Toomey, (R-Pa.), Deb Fischer (R-Neb.), Mike Lee, (R-Utah) and Chuck Grassley (R-Iowa), in a asking the administration to get tougher on China.
“It is necessary for your administration to evaluate the tariff experiences of the last three years and determine the policies that have worked and those that have not,” the letter read in part. “By doing so, we can stop damaging actions and retaliation and mend relationships while listening to the businesses across the country that have suffered from the negative economic consequences. We urge the administration to listen to the many stories of these businesses and end the self-inflicted harm from the trade war.”
The lawmakers may have some data to support their arguments. According to data from the BEA, the U.S. monthly international trade deficit hit $71.2 billion in May, up from $69.1 billion the previous month as imports increased more than exports. According to the BEA, goods hit $408.6 billion, up $24.5 billion, while imports of goods were $677 billion, an increase of $39.9 billion.
“The increases in both exports and imports reflected increases in nearly all major categories, led by industrial supplies and materials, primarily petroleum and products, that were partly offset by a decrease in automotive vehicles, parts and engines,” the BEA said in its report.
Moreover, the U,S, net international investment position continues to be in the red, according to the BEA. This marks the difference between the foreign financial assets and liabilities of U.S. residents. At the end of the first quarter, it stood at $14.32 trillion. The BEA reported that assets totaled $32.81 trillion and liabilities were $47.13 trillion.
“The U.S. international investment position statistics reflect the impact of the COVID-19 pandemic and the economic recovery,” the BEA said in a statement. “The full economic effects of the pandemic cannot be separately identified in the statistics.”
According to the BEA data, trade deficits were recorded with several trading partners, led by China ($27.2, up $5.1 billion from the previous month) and the European Union ($18.5, up $2.4 billion). Mexico’s trade deficit with the U.S. was $7.7 billion, while Canada’s was $4.8 billion.
The BEA’s May data show a $4 billion trade surplus with South America and Central America. Other nations with surpluses include Hong Kong, at $2.7 billion, Brazil, at $1.2 billion, and the United Kingdom at $1 billion.
BEA data also show that May exports were $206 billion, while May imports were $277.3 billion. For the year, the goods and services deficit rose $110.9 billion, or 45.8%, from the same period during the previous year.
The U.S. Bureau of Economic Analysis provides accurate and objective data about the performance of the nation's economy. National and local governments, as well as businesses of all sizes, rely on BEA's information as it relates to interest rates, trade policies, taxes, spending, hiring and investments, and more. It collects source data, conducts research and analysis, develops and implements estimation methodologies, and disseminates statistics to the public. It is an agency of the Department of Commerce.
The information provided by the BEA is nonpartisan, nonpolitical, and neutral on policy. The information is independently produced, publicly release on a schedule, and free to access on the bea.gov website.