High oil prices have helped to send the U.S. international trade deficit to nearly $1 trillion, according to a Tuesday release by the Bureau of Economic Analysis.
The goods and services deficit in 2022 was $948.1 billion, an increase of $103 billion over the deficit in 2021, with imports up $556.1 billion.
The increase in trade deficit is in large part due to higher crude oil prices, although falling crude oil prices toward the back end of the year when crude prices were lower, saw imports of industrial supplies and materials--which includes crude oil—fall $2.7 billion to $59.6 billion. Exports in December fell to $250.2 billion, with goods shipments dropping 1.7% mainly on the back of falling crude prices.
Ovearll in 2022, exports of crude oil on a Census basis increased by $47.5 billion, with fuel oil increasing by $28.1 billion. Meanwhile, imports of crude oil rose by $65.1 billion, with other petroleum products increasing by $12.6 billion.
The U.S. deficit widened with countries such as China, the European Union, Mexico, Canada, Germany, Japan, India, Russia, and Saudi Arabia, to name but a few trade partners, but the largest increase in the deficit was with the EU.
Poster Comment:
The traditional solution to a trillion dollar trade deficit for a nation with a $1.38 trillion budget deficit is:
1) lower wages so we cannot afford to import so much. (But you say that will increase the budget deficit.)
2) raise the cost of imported goods drastically making them unaffordable. (But you say that impoverishes workers and leads to a Depression and a bigger budget deficit.)
3) Double interest rates so foreigners will hold dollars. (But you say that will shut down the economy, lower stock prices and frighten foreign investors.)
I guess there is no solution but hyperinflation and civil war because I am not running the DC criminal enterprise.