The total value of goods being imported to the United States and being exported from the United States is shrinking.
That new trend, rarely seen outside periods of recession, started taking hold after October 2022 but has become much more pronounced in the months since February 2023. That's when the total amount of goods arriving and departing U.S. ports peaked at $453.2 billion. Three months later, the total value of goods passing through U.S. ports has fallen by $7.9 billion (-1.7%) to $445.3 billion.
We find most of that reduction is taking place in the goods the U.S. trades with the rest of the world. Total U.S. imports and exports without China peaked at $397.3 billion in February 2023 and has since declined by $5.2 billion to reach $392.1 billion in May 2023.
These changes are illustrated in the following chart:
Meanwhile, trade with China actually improved slightly in May 2023, with an increase in Chinese imports to the United States offsetting a sharp decline in U.S. exports to China. Both however are far below their year ago levels, with the growth rate of U.S. exports to China in May 2023 turning negative for the first time in more than a year.
That pattern means the trajectory of the trailing twelve month average of the combined value of physical goods imported and exported between the U.S. and China continued moving downward in May 2023. The gap between the trailing year average of US-China trade and its post-pandemic recovery counterfactual based on how trade between the two nations recovered after the Great Recession expanded to $8.3 billion despite rising during the last three months.
Curiously, media reports in the U.S. have myopically focused on the narrowing of the U.S. trade deficit with the rest of the world, the difference between its imports and exports including goods and services, and haven't absorbed that the total trade in physical goods has been shrinking.
References
U.S. Census Bureau. Trade in Goods with China. Last updated: 6 July 2023.
Image credit: Photo by Ronan Furuta on Unsplash.