Visualized: The Largest Trading Partners of the U.S.
The United States is the world’s biggest goods importer making it a powerhouse in the global movement of goods.
With so many imports, it goes without saying that the country has a significant goods deficit with many of its trading partners. The deficit with China, for example, is $383 billion. Meanwhile, the total goods trade deficit is nearly $1.2 trillion and it increased by 9% in 2022.
Given that the country has trade relations with more than 200 countries, regions, and territories, this network of relationships is complex. This visual, using data from the U.S. Bureau of Economic Analysis, makes trade relationships easier to understand, ranking the biggest trading partners of the U.S. in terms of goods trade alongside the value of exports and imports.
A Closer Look At U.S. Trade Balances
Trade balances are characterized in two ways: deficits and surpluses.
Each balance is determined by calculating the difference in U.S. exports and imports with a given trade partner. So while the balance with Ireland is a deficit of $66.1 billion, the balance with the Netherlands is a surplus of $38.3 billion.
|#1||🇨🇳 China||$153.8 B||$536.8 B||-$382.9 B|
|#2||🇲🇽 Mexico||$324.4 B||$454.9 B||-$130.6 B|
|#3||🇻🇳 Vietnam||$11.4 B||$127.5 B||-$116.1 B|
|#4||🇨🇦 Canada||$356.1 B||$437.7 B||-$81.6 B|
|#5||🇩🇪 Germany||$72.9 B||$146.6 B||-$73.7 B|
|#6||🇯🇵 Japan||$80.3 B||$148.3 B||-$68.0 B|
|#7||🇮🇪 Ireland||$16.0 B||$82.0 B||-$66.1 B|
|#8||🇹🇼 Taiwan||$43.7 B||$91.8 B||-$48.1 B|
|#9||🇰🇷 South Korea||$71.5 B||$115.3 B||-$43.9 B|
|#10||🇹🇭 Thailand||$15.6 B||$58.7 B||-$43.1 B|
|#11||🇮🇹 Italy||$27.4 B||$69.1 B||-$41.7 B|
|#12||🇮🇳 India||$47.3 B||$85.7 B||-$38.3 B|
|#13||🇲🇾 Malaysia||$18.1 B||$54.8 B||-$36.6 B|
|#14||🇮🇩 Indonesia||$10.0 B||$34.6 B||-$24.6 B|
|#15||🇨🇭 Switzerland||$36.9 B||$59.5 B||-$22.6 B|
|#16||🇦🇹 Austria||$4.8 B||$17.8 B||-$13.1 B|
|#17||🇷🇺 Russia||$1.7 B||$14.5 B||-$12.7 B|
|#18||🇸🇦 Saudi Arabia||$11.6 B||$23.5 B||-$11.9 B|
|#19||🇫🇷 France||$45.8 B||$57.4 B||-$11.5 B|
|#20||🇸🇪 Sweden||$7.7 B||$17.1 B||-$9.4 B|
|#21||🇿🇦 South Africa||$6.5 B||$14.6 B||-$8.1 B|
|#22||🇮🇱 Israel||$14.2 B||$21.4 B||-$7.2 B|
|#23||🇵🇭 Philippines||$9.3 B||$16.2 B||-$6.9 B|
|#24||🇫🇮 Finland||$2.7 B||$8.7 B||-$6.1 B|
|#25||🇭🇺 Hungary||$2.9 B||$7.7 B||-$4.8 B|
|#26||🇨🇿 Czechia||$3.8 B||$7.5 B||-$3.7 B|
|#27||🇳🇴 Norway||$4.7 B||$6.7 B||-$2.0 B|
|#28||🇩🇿 Algeria||$1.2 B||$3.1 B||-$1.9 B|
|#29||🇳🇬 Nigeria||$3.4 B||$4.8 B||-$1.4 B|
|#30||🇵🇱 Poland||$11.3 B||$11.9 B||-$5.8 B|
|#31||🇻🇪 Venezuela||$2.3 B||$0.4 B||+$1.9 B|
|#32||🇨🇴 Colombia||$20.6 B||$18.6 B||+$2.0 B|
|#33||🇪🇸 Spain||$26.5 B||$23.1 B||+$3.4 B|
|#34||🇪🇬 Egypt||$6.6 B||$2.8 B||+$3.7 B|
|#35||🇦🇷 Argentina||$12.9 B||$6.9 B||+$5.9 B|
|#36||🇨🇱 Chile||$23.3 B||$15.6 B||+$7.7 B|
|#37||🇧🇪 Belgium||$35.5 B||$26.8 B||+$8.8 B|
|#38||🇬🇧 United Kingdom||$77.3 B||$64.0 B||+$13.3 B|
|#39||🇦🇺 Australia||$30.2 B||$16.2 B||+$14.0 B|
|#40||🇸🇬 Singapore||$46.2 B||$31.6 B||+$14.5 B|
|#41||🇧🇷 Brazil||$53.6 B||$39.0 B||+$14.6 B|
|#42||🇭🇰 Hong Kong||$25.9 B||$4.8 B||+$21.1 B|
|#43||🇳🇱 Netherlands||$72.9 B||$34.6 B||+$38.3 B|
|Total||$2.07 T||$3.25 T||-$1.18 T|
Note: Balances may not add up exactly due to rounding. Smaller trade relationships excluded on above table.
The U.S.’ largest trading partners are some of the world’s biggest exporters. ‘Made in China’ is ubiquitous for a reason. Manufacturing in places like Vietnam is playing a more essential role in the global economy, and thus the country shows up prominently on the chart above. Taiwan is also a major player due to its dominance in the semiconductor market.
Additionally, some of the most important partners are a case of proximity. Canada and Mexico are members of the USMCA agreement (which replaced NAFTA), making North America one of the world’s largest free trade zones. The U.S. dollar is typically stronger than the Canadian dollar and Mexican peso, making imports from Canada and Mexico relatively cheaper for U.S. consumers and businesses. Mexico’s lower labor costs and Canada’s petroleum surplus both play a role in trade imbalances as well.
While number one in terms of imports and services exports, the U.S. is the 2nd biggest goods exporter globally, revealed in its trade surpluses with countries like Hong Kong and the UK.
What’s Being Traded?
Without context, the chart above simply consists of large numbers. Below, we look at the actual goods moving between countries.
Overall, exports increased by 18% year-over-year. Here’s a look at some of the biggest recorded export items in 2022, alongside the dollar values:
- Crude oil: $47.5 billion
- Natural gas: $22.9 billion
- Civilian aircraft engines: $7.2 billion
- Soybeans: $7.0 billion
This list largest exports includes both commodities as well as items higher up on the economic complexity ladder, like airplane engines.
Imports increased by 15% last year. Interestingly, one of the top imports was crude oil—also one of the country’s top exports—equalling $65.1 billion. Here’s a look at the other big import items:
- Telecommunications equipment: $12.6 billion
- Pharmaceutical preparations: $18.8 billion
- Cell phones and other household goods: $11.0 billion
- Passenger cars: $19.0 billion
America’s largest imports tend to be vehicles and electronics. Non-tech goods like pharmaceuticals and furniture also rank high on the list.
The Trade Deficit Over Time
The U.S. has been at a deficit for over 40 years, so the current trend is no surprise.
While total trade (this time including both goods and services) dipped during the pandemic, the graph below reveals that trade figures are now higher than pre-pandemic levels and the overall deficit continues to increase.
Despite the trade deficit and a drop in manufacturing employment over time, U.S. industrial production has been increasing over the long term.
Notably, there have been some recent efforts to onshore manufacturing in a few key sectors.
For example, the U.S. government has stressed the importance of American-made semiconductor chips, after pandemic delays in Taiwan put major strain on a wide range of industries. The government introduced the CHIPS Act, which will help set up two semiconductor chip manufacturing hubs by 2030, among other things.
Visualizing Portfolio Return Expectations, by Country
This graphic shows the gap in portfolio return expectations between investors and advisors around the world, revealing a range of market outlooks.
Visualizing Portfolio Return Expectations, by Country
How do investors’ return expectations differ from those of advisors? How does this expectation gap shift across countries?
Despite 2022 being the worst year for stock markets in over a decade, investors around the world appear confident about the long-term performance of their portfolios. These convictions point towards resilience across global economies, driven by strong labor markets and moderating inflation.
While advisors are optimistic, their expectations are more conservative overall.
This graphic shows the return expectation gap by country between investors and financial professionals in 2023, based on data from Natixis.
Expectation Gap by Country
Below, we show the return expectation gap by country, based on a survey of 8,550 investors and 2,700 financial professionals:
|🇭🇰 Hong Kong SAR||12.4%||7.6%||1.6X|
Investors in the U.S. have the highest long-term annual return expectations, at 15.6%. The U.S. also has the highest expectations gap across countries, with investors’ expectations more than double that of advisors.
Likely influencing investor convictions are the outsized returns seen in the last decade, led by big tech. This year is no exception, as a handful of tech giants are seeing soaring returns, lifting the overall market.
From a broader perspective, the S&P 500 has returned 11.5% on average annually since 1928.
Following next in line were investors in Chile and Mexico with return expectations of 15.1% and 14.7%, respectively. Unlike many global markets, the MSCI Chile Index posted double-digit returns in 2022.
Global financial hub, Singapore, has the lowest expectations gap across countries.
Investors in the UK and Europe, have the most moderate return expectations overall. Confidence has been weighed down by geopolitical tensions, high interest rates, and dismal economic data.
Return Expectations Across Asset Classes
What are the expected returns for different asset classes over the next decade?
A separate report by Vanguard used a quantitative model to forecast returns through to 2033. For U.S. equities, it projects 4.1-6.1% in annualized returns. Global equities are forecast to have 6.4-8.4% returns, outperforming U.S. stocks over the next decade.
Bonds, meanwhile, are forecast to see 3.6-4.6% annualized returns for the U.S. aggregate market, while U.S. Treasuries are projected to average 3.3-4.3% annually.
While it’s impossible to predict the future, we can see a clear expectation gap not only between countries, but between advisors, clients, and other models. Factors such as inflation, interest rates, and the ability for countries to weather economic headwinds will likely have a significant influence on future portfolio returns.
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