Data from March shows that the U.S. experienced a record high deficit that month. The United States’ trade deficit can be explained as a country taking in more imports than it sends exports.
According to ZeroHedge, imports rose 10.3% to reach $351.52 billion in March. March’s gain is a nearly $33 billion increase from February and is a new record high for the United States.
U.S. exports increased in March as well, but not enough to come close to closing the trade deficit. Exports in March rose 5.6% for a total value of $241.72 billion. This is a $12.9 billion increase from February.
The gap between imports and exports widened by 22.3%, to a $109.8 billion deficit. Reportedly, this gap exceeded deficit estimates from Bloomberg economists, who predicted an increase of $107.1 billion.
Before the COVID-19 pandemic, the U.S. trade deficit hovered between $40 to $50 billion a month, as was the pattern for years. However, since the COVID-19 pandemic, the deficit has continually spiked higher and higher.
Imports increased so significantly due to a variety of factors. In March, previously stalled U.S. ports were open and operating at near-normal or normal levels compared to the previous gridlock at docks. This opening helped alleviate the bottleneck of the shipping industry, letting stores stock their shelves.
The U.S. saw growth in exports due to an influx of orders for industrial supplies and equipment. According to the BEA, industrial supplies and materials accounted for $7.4 billion of the overall export growth and was the leading U.S. export.
There are signs that the U.S. may experience a boom in exports soon due to a myriad of global crises. As China has its two economic powerhouses in lockdown and the war in Ukraine rages, the need for U.S. goods could increase, possibly lessening the gap between U.S. imports and exports.
However, consumerism is still at an all-time high with a strong American dollar. Such factors could cause the import gap to remain high or even increase.