ASHINGTON (WSJ) —The U.S. trade deficit increased 27% last year to an all-time high of $859.1 billion, underscoring the strength of the American economy, as well as its continued hefty dependence on imports from China and other nations.
The 2021 trade deficit in goods and services well exceeded the previous record of $763.53 billion in 2006, the Commerce Department said Tuesday. Annual trade-balance records, which aren’t inflation-adjusted, date to 1960.
The trade deficit with China grew 14.5% for the full year to $355.3 billion, reversing the decline that followed then-president Donald Trump’s policies aimed at reducing the deficit with tariffs and purchase targets. Last year’s deficit was still below the record trade deficit of $418.2 billion that the U.S. set with China in 2018, when Trump was in office.
China has bought 57% of the U.S. goods and services it committed to purchase over 2020 and 2021, under the bilateral agreement signed with the Trump administration in January 2020, according to an analysis by Chad Bown, a senior fellow at Peterson Institute for International Economics.
The wider deficit with China increases pressure on the Biden administration to respond to Beijing’s failure to meet its pledge. Administration officials have said they would hold China accountable but haven’t disclosed specific steps.