Ranked: Visualizing the Largest Trading Partners of the U.S.
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Ranked: Visualizing the Largest Trading Partners of the U.S.

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U.S. Largest Trading Partners

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Ranked: The Largest Trading Partners of the U.S.

The U.S. economy grew 5.7% in 2021, the fastest pace since 1984, bouncing back from the economic downturn created by the pandemic. But as supply chain issues reared their head and international restrictions came in and out of play, how did the country’s trade situation shape up?

America’s trade deficit of goods shot up to a whopping record $1.1 trillion in 2021 from $922 billion in 2020, leading to its largest ever deficit. Imports dwarfed exports, reaching new highs of $2.9 trillion in 2021, while U.S. exports to other countries added up to $1.8 trillion.

Using the latest data on international trade from the U.S. Census Bureau, we’ve visualized the flow of America’s annual imports and exports for selected countries. The difference between the two measures is the country’s trade deficit for goods.

Who Does the U.S. Trade Most With?

In 2021, U.S trade of goods amounted to nearly $4.6 trillion and Canada, Mexico, and China were America’s largest trading partners. Those three countries alone combined for a total trade of $1.9 trillion, equal to about 41% of all trade of goods.

Let’s take a look at the 10 countries that trade the most with the United States:

RankU.S. Trade PartnersGoods Imports
(in billion U.S. dollars)
Goods Exports
(in billion U.S. dollars)
Total Trade
(in billion U.S. dollars)
#1🇨🇦 Canada$357.2$307.6$664.8
#2🇲🇽 Mexico$384.7$276.5$661.2
#3🇨🇳 China$506.4$151.1$657.5
#4🇯🇵 Japan$135.1$75.0$210.1
#5🇩🇪 Germany$135.2$65.2$200.4
#6🇰🇷 South Korea$95$65.8$160.8
#7🇬🇧 United Kingdom$56.4$61.5$117.9
#8🇹🇼 Taiwan$77.1$36.9$114
#9🇮🇳 India$73.3$40.1$113.4
#10🇻🇳 Vietnam$101.9$10.9$112.8
Total$2.85 Trillion$1.76 Trillion$4.61 Trillion

From a geographic perspective, the two largest trading partners are based in North America (Canada and Mexico). Meanwhile, six of the top 10 are based in Asia.

Which Countries Does the U.S. Have the Largest Trade Deficit With?

The largest trade deficit is undoubtedly with China, which accounts for more than 32% of the U.S. trade deficit in goods.

The $355 billion deficit with China comes from importing $506 billion in goods such as machinery, furniture, and bedding. Interestingly, many of those imports are made by American companies who outsource their production to China. These outsourcing activities are counted as imports even though they create profit for these U.S. companies.

Below we order U.S. trade partners by trade deficit of goods:

RankU.S. Trade PartnersGoods Trade Deficit
(in billion U.S. dollars)
#1🇨🇳 China$355.3
#2🇲🇽 Mexico$108.2
#3🇻🇳 Vietnam$91.0
#4🇩🇪 Germany$70.1
#5🇯🇵 Japan $60.2
#6🇮🇪 Ireland$60.2
#7🇨🇦 Canada$49.5
#8🇲🇾 Malaysia$41.0
#9🇹🇼 Taiwan$40.2
#10🇮🇹 Italy$39.3
Total Deficit$1.09 Trillion

The second largest U.S. trade deficit is with Mexico with $108 billion. The main imports from Mexico are cars, trucks, and auto parts. On the other side, the main exports are auto parts and petroleum products.

How Does a Trade Deficit Affect the U.S. Economy?

The U.S. has been running trade deficits since the late 1970s, so these latest numbers are a continuation of a long-term trend. Are these trade deficits a bad thing? The simple, unsatisfying answer is, it depends.

When any country spends more money on imports than it makes on exports, it must somehow make up the shortfall. Typically, this means takes the form of borrowing from foreign lenders or allowing foreign investment in domestic assets. In the U.S., the trade imbalance with China is a sore point, as millions of jobs in manufacturing have been lost due to offshoring in recent decades.

That said, running a trade surplus is no guarantee of strong economic performance. Germany is a prime example of a country with a massive trade surplus, but achieving only modest economic growth in recent years.

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The Top Google Searches Related to Investing in 2022

What was on investors’ minds in 2022? Discover the top Google searches and how the dominant trends played out in portfolios.

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Trend lines showing when the top Google searches related to investing reached peak popularity over the course of 2022.
The following content is sponsored by New York Life Investments

The Top Google Searches Related to Investing in 2022

It was a turbulent year for the markets in 2022, with geopolitical conflict, rising prices, and the labor market playing key roles. Which stories captured investors’ attention the most? 

This infographic from New York Life Investments outlines the top Google searches related to investing in 2022, and offers a closer look at some of the trends.

Top Google Searches: Year in Review

We picked some of the top economic and investing stories that saw peak search interest in the U.S. each month, according to Google Trends.

Month of Peak InterestSearch Term
JanuaryGreat Resignation
FebruaryRussian Stock Market
MarchOil Price
April Housing Bubble
MayValue Investing
JuneBitcoin
JulyRecession
AugustInflation
SeptemberUS Dollar
OctoberOPEC
NovemberLayoffs
DecemberInterest Rate Forecast

Data based on exact searches in the U.S. from December 26, 2021 to December 18, 2022.

Let’s look at each quarter in more detail, to see how these top Google searches were related to activity in the economy and investors’ portfolios.

Q1 2022

The start of the year was marked by U.S. workers quitting their jobs in record numbers, and the effects of the Russia-Ukraine war. For instance, the price of crude oil skyrocketed after the war caused supply uncertainties. Early March’s peak of $125 per barrel was a 13-year high.

DateClosing Price of WTI Crude Oil
(USD/Barrel)
January 2, 2022$76
March 3, 2022$125
December 29, 2022$80

While crude oil lost nearly all its gains by year-end, the energy sector in general performed well. In fact, the S&P 500 Energy Index gained 57% over the year compared to the S&P 500’s 19% loss.

Q2 2022

The second quarter of 2022 saw abnormal house price growth, renewed interest in value investing, and a bitcoin crash. In particular, value investing performed much better than growth investing over the course of the year.

IndexPrice Return in 2022
S&P 500 Value Index-7.4%
S&P 500 Growth Index-30.1%

Value stocks have typically outperformed during periods of rising rates, and 2022 was no exception.

Q3 2022

The third quarter was defined by worries about a recession and inflation, along with interest in the rising U.S. dollar. In fact, the U.S. dollar gained against nearly every major currency.

Currency USD Appreciation Against Currency
(Dec 31 2020-Sep 30 2022)
Japanese Yen40.1%
Chinese Yuan9.2%
Euro25.1%
Canadian Dollar7.2%
British Pound22.0%
Australian Dollar18.1%

Higher interest rates made the U.S. dollar more attractive to investors, since it meant they would get a higher return on their fixed income investments.

Q4 2022

The end of the year was dominated by OPEC cutting oil production, high layoffs in the tech sector, and curiosity about the future of interest rates. The Federal Reserve’s December 2022 economic projections offer clues about the trajectory of the policy rate.

 202320242025Longer Run
Minimum Projection4.9%3.1%2.4%2.3%
Median Projection5.1%4.1%3.1%2.5%
Maximum Projection5.6%5.6%5.6%3.3%

The Federal Reserve expects interest rates to peak in 2023, with rates to remain elevated above pre-pandemic levels for the foreseeable future.

The Top Google Searches to Come

After a year of volatility across asset classes, economic uncertainty remains. Which themes will become investors’ top Google searches in 2023?

Find out how New York Life Investments can help you make sense of market trends.

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