U.S. Trade Deficit Hits Historic $1 Trillion Under Biden Economy

U.S. trade deficit in goods surges to record high.

QUICK FACTS:
  • The U.S. trade deficit in goods rose in December following an import surge, hitting a monthly record high, while bringing the total shortfall for all of 2021 to over $1 trillion, also a historic first, The Epoch Times reports.
  • The trade deficit in goods (the difference between imports and exports of products) rose by a monthly 3% in December, an all-time high of $101 billion, the Commerce Department said in a Jan 26 statement.
  • The previous record was set in November, when the trade gap climbed to $98 billion.
  • January through November of 2021 saw the goods deficit climb to $984.8 billion, with December’s reading pushing that figure up through a psychological $1 trillion barrier, Epoch Times notes.
WHAT ECONOMISTS ARE SAYING
  • “The 1st ever monthly goods trade deficit to exceed $100 billion resulted in a $1.08 trillion deficit for 2021, the 1st year to top $1 trillion,” economist Peter Schiff wrote in a Twitter post, in which he argued that current inflation is the result of loose monetary and fiscal policies, Epoch Times reports.
  • “So prices aren’t rising due to a shortage of goods but a surplus of money. The real goods shortage will arrive after the dollar crashes!” Schiff argued.
  • “It will likely take time for the supply-chain issues to ease, which could keep U.S. goods inflation elevated,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania, Reuters reports.
BACKGROUND:
  • In response to surging inflation, the Federal Reserve is dialing back its loose monetary settings.
  • Fed Chair Jerome Powell struck a hawkish note on Wednesday, telling reporters after a two-day policy meeting that officials are looking to start hiking rates in March to tame runaway prices, according to Epoch Times.