U.S. trade topped $1 trillion in the first four months of the year, according to U.S. Census Bureau data released Tuesday.
At this pace, annual imports will top the total U.S. trade — including exports — reached in 2020, just two years ago, by almost 10%.
Through April, U.S. trade totaled $1,.70 trillion, an increase of 20.79% over the same four months of 2021, a record-setting year.
Prior to this year, U.S. imports had never topped $900 billion in the first four months. While imports increased 22.08%. U.S. exports 18.75%. In most years, that percentage would be astonishing, particularly coming off a record year for exports.
Because the record-setting $650.58 billion in exports failed to keep pace with record-setting import growth, the U.S. deficit — which last year topped $1 trillion for the first time — topped $400 billion for the first time through the first four months of a year. Last year, the April YTD deficit topped $300 billion for the first time.
What’s going on? If you drive a car, you know.
While imports indeed surged, it can all be summed up in three letters: Oil. And then the letters of its by-products — gasoline and other refined petroleum products and liquid and natural gas. And not just on the import side.
Largely due to the Russian invasion of Ukraine but also to a general resumption of driving and flying activity that had been subdued by Covid-19 in 2020, the price of oil has rebounded rapidly.
That means that China and Mexico, the two largest manufacturers for U.S. goods, cannot keep up with Canada, by far the largest supplier of imported U.S. oil. Consequently, it is the nation’s top-ranked trade partner. And not by a little does it rank first.
Through April, Canada-U.S. trade topped $254.91 billion, the most-ever by one nation in four months and on pace to break the single-year record for U.S. trade by one nation — which it set last year at $664.16 billion.
Mexico-U.S. trade stood at $248.36 billion with China at $226.90 billion. These three nations made up just under 43% of all U.S. trade through April, a customary percentage for the three.
Generally speaking, however, the totals for the three are relatively close. With oil prices above $100 a barrel and China still periodically shutting down to attempt to achieve zero tolerance for Covid-19, the deck has been shuffled, with neither China nor Mexico on top.
The importance of energy trade is clear.
The value of total U.S. exports and imports of oil, refined petroleum and natural gases topped $195.85 billion through April, breaking the record set in 2012, when the total was $1.82.82 billion.
There’s a significant difference between 20212 and today, however. In 2012, 61% of that total was imported oil. Through April of this year, although U.S. oil imports were at surpassed $60 billion for the first time since 2014, imported oil accounted for but 31% of the total.
In that decade, U.S. exports of oil have increased 4,245.56%, gasoline and other refined petroleum products 22.15%, and LN
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G and other natural gases 843.51%.
Consequently, through April, the United States was a net exporter of these three primary oil-related commodities, with exports at $102.73 billion — the first time above $100 billion — and imports at $93.13 billion. It is the third April YTD in a row where the United States was a net exporter.
