Economic Snapshot | Trade and Globalization

Scale-tipping growth spurt for U.S. trade deficit

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for January 17, 2001.

Scale-tipping growth spurt for U.S. trade deficit
Between 1960 and 1980 the U.S. economy maintained, on average, roughly balanced trade with the world’s other economies. In the 1960s, the United States ran a small trade surplus of $32 billion, or about $3.2 billion per year. In the 1970s, the U.S. had a small deficit on goods and services trade of $82 billion, or $8.2 billion per year.

But over the next 20 years, from 1981 to 2000, trade became grossly unbalanced, with the United States running an aggregate trade deficit of nearly $2,260 billion since 1980, or about $113 billion per year. Since 1997, this already large increase in the trade deficit has grown at an even faster rate, jumping nearly one percentage point of gross domestic product annually (as shown in the figure below). The trade deficit reached an all-time peak share of 3.7% of GDP in the third quarter of 2000, far surpassing the previous record set in 1987.

Trade Balance as a share of GDP, 1960-2000:III

This week’s Snapshot by EPI economist Robert E. Scott.

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