December 13, 2022

The U.S. trade deficit in goods and services grew to $78.2 billion in October.

In 2021, the U.S. trade deficit hit a new record at $845.0 billion. Higher tariff policies under the Trump and Biden Administrations have not made any significant dent in the trade deficit. Usually the trade deficit shrinks during a recession, but it grew rapidly during the Covid recession.

The widening trade deficit likely is due in part to the strong U.S. dollar. Though the value of the dollar, on a trade-weighted basis, peaked in October, it is still up +6.0% from a year ago.