The U.S. Census Bureau reports that the annual U.S. trade deficit in goods and services increased slightly from $500.4 billion in 2015 to $502.3 billion in 2016, an increase of $1.9 billion (0.4 percent). This reflects a $14.4 billion (5.5 percent) decline in the services trade surplus and a $12.5 billion (1.6 percent) decrease in the goods trade deficit. However, the small increase in the overall goods and services trade deficit, and its downward trend over the past decade, mask important structural shifts in U.S. trade.
Falling petroleum prices and rising domestic petroleum production and exports have obscured surging imports of nonpetroleum goods (NPGs) —the vast bulk of which are manufactured products—into the United States since 2013. The trade deficit in NPGs, which has the most impact on workers and communities, has increased sharply. The U.S. trade deficit in petroleum goods declined by $22.7 billion (32.8 percent) in 2016, while the trade deficit in NPGs increased by $16.4 billion (2.5 percent), continuing the sharp run-up in the NPG trade deficit since 2013.
The U.S. trade deficit in NPGs is now at an all-time high (shown with dark blue bars in the figure below) while the overall U.S. balance of trade in goods and services (shown with light blue bars) has fallen sharply from a peak of $761.7 billion in 2006 to $502.3 billion in 2016—obscuring the much larger (and more important) trade deficit in NPGs.
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