The total value of goods the United States exchanged with every other nation on Earth declined in 2023. According to initial estimates for 2023, the total value of U.S. exports dropped by $48.3 billion from 2022's level to $2,016.8 billion. Total U.S. imports dropped by $158.4 billion to $3,084.1 billion.
The combined net change is a reduction of $206.7 billion, which is the first to be recorded for a calendar year following 2020's Coronavirus Recession.
While the decline in trade with China continues to be the big story for U.S. trade, the overall decline in trade is not limited to just that nation. The net value of goods exchanged between the U.S. and the rest of the world also fell throughout 2023.
The following chart shows the monthly progression of that decline. The good news is it appears to be leveling out, but the bad news is the trajectory for trade is far below the potential of how high it could have grown during 2023.
Trade between the U.S. and the world has been shrinking since February 2023 as a result of President Biden's trade policies. After peaking in February 2023, we estimate the value of goods the U.S. exchanges with the world excluding China has cumulatively fallen by $282 billion with respect to how large it would have grown had it simply continued following its trend from October 2022 through February 2023.
The Biden administration implemented trade restrictions on the export of semiconductor chips to China on 7 October 2022, which is why we use this month as a reference. Since that action primarily affected trade with China, the trend from October 2022 through February 2023 represents a baseline trajectory of how trade was growing between the U.S. and the rest of the world excluding China before the Biden administration's destructive new trade policies were imposed.
When we exclude the value of goods exchanged between the U.S. and China, we find the cumulative loss of trade and the rest of the world (without China) from February 2023 through December 2023 adds up to $185.5 billion. In December 2023, the gap between the counterfactual for trade between the U.S. and the world clocked in at $42.0 billion, while the gap in trade between the U.S. and the world excluding China was $30.4 billion.
References
U.S. Census Bureau. Trade in Goods with China. Last updated: 7 February 2024.
U.S. Census Bureau. Trade in Goods with World, Not Seasonally Adjusted. Last updated: 7 February 2024.
Image credit: Port of Seattle cranes by Ron Clausen on Wikimedia Commons. Creative Commons Attribution-Share Alike 4.0 International.