U.S. International Trade: Trends and Forecasts
Dick K. Nanto
Specialist in Industry and Trade
J. Michael Donnelly
Information Research Specialist
May 13, 2011
Congressional Research Service
7-5700
www.crs.gov
RL33577
CRS Report for Congress
P
repared for Members and Committees of Congress

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U.S. International Trade: Trends and Forecasts

Summary
The global financial crisis, now officially dated to the 19 months from December 2007 through
June 2009, caused the U.S. trade deficit to decrease from August 2008 through May 2009, but
since then it has begun to increase again as recovery has commenced. The financial crisis caused
U.S. imports to drop faster than U.S. exports, but that has been reversed as U.S. demand for
imports recover.
In 2010, the trade deficit in goods reached $646.5 billion on a balance of payments (BoP) basis,
more than the $506.9 billion in 2009, but less than the $834.7 billion in 2008. The 2010 deficit on
merchandise trade (Census basis) with China was $273 billion, with the European Union (EU27)
was $634.6 billion, with Canada was $28.3 billion, with Japan was $59.8 billion, and with
Mexico was $66.3 billion. With the Asian Newly Industrialized Countries (Hong Kong, South
Korea, Singapore, and Taiwan), the trade balance moved from a deficit of $5.5 billion in 2007 to
surpluses of $2.2 billion in 2008, $3.5 billion in 2009, and $14 billion in 2010. Imports of goods
of $1,935.6 billion increased by $360.2 billion, 18.5% over 2009. Exports of goods of $1,289.1
billion increased by $220.6 billion or 20.6%. The overall merchandise trade deficit for 2010
increased, or became more negative, by $131 billion or 26% over 2009.
Despite increasing debts, in 2010, the United States ran a surplus of $163 billion in investment
income with the rest of the world. With China, however, there was a deficit of $37 billion and
with Japan $33 billion. In automotive trade, the U.S. ran deficits of $44 billion with Japan, $37
billion with Mexico, $18 billion with Germany, and $11 billion with South Korea. In energy
trade, the U.S. deficit in 2010 of $273 billion was 26% greater than the $217 billion in 2009, but
less than the $415 deficit in 2008. We examine in detail: high technology trade; energy trade and
the crude oil deficit and sources; and transportation trade.
Trade deficits are a concern for Congress because they may generate trade friction and pressures
for the government to do more to open foreign markets, to shield U.S. producers from foreign
competition, or to assist U.S. industries to become more competitive. Overall U.S. trade deficits
reflect excess spending (a shortage of savings) in the domestic economy and a reliance on capital
imports to finance that shortfall. Capital inflows serve to offset the outflow of dollars used to pay
for imports. Movements in the exchange rate help to balance trade. The rising trade deficit (when
not matched by capital inflows) places downward pressure on the value of the dollar, which, in
turn, helps to shrink the deficit by making U.S. exports cheaper and imports more expensive.
Central banks in countries such as China, however, have intervened in foreign exchange markets
to keep the value of their currencies from rising too fast. The trade agenda of the 112th Congress
centers on three Free Trade Agreements awaiting congressional action and trade with China.
The balance on current account includes merchandise trade plus trade in services and unilateral
transfers. In 2010, the deficit on current account grew to $470.2 billion from 2009’s $378.4
billion and from $668.9 billion in 2008. IHS Global Insight forecasts a higher deficit on current
account for 2011, at $557 billion, and remaining near $600 billion through 2016.
Selected Legislation: S. 380, S. 433/H.R. 913, S. 308, S. 328/H.R. 639, H.R. 1655, H.R. 29, H.R.
516, H.R. 554, H.R. 833, S. 98, S. 708.

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U.S. International Trade: Trends and Forecasts

Contents
Most Recent Developments......................................................................................................... 1
Trade in Goods...................................................................................................................... 2
Trade in Services................................................................................................................... 3
Trade in Goods and Services ................................................................................................. 3
International Trade and U.S. Trade Policy ................................................................................... 4
The Trade Deficit and the Dollar ................................................................................................. 8
Types of Trade Data .................................................................................................................. 12
U.S. Merchandise Trade Balance............................................................................................... 13
Current Account Balance........................................................................................................... 16
Forecasts................................................................................................................................... 19
U.S. Trade with Selected Nations .............................................................................................. 20
U.S. Current Account Balances with Selected Nations in 2009 and 2010 ................................... 24
Advanced Technology, Transportation, and Energy.................................................................... 27
High Technology Trade ....................................................................................................... 27
Motor Vehicle Trade............................................................................................................ 29
Energy Trade....................................................................................................................... 30
Some Common Perceptions ...................................................................................................... 33
Is Trade with China Merely Replacing That with Southeast Asia?........................................ 33
Trade Balances with Free Trade Agreement Nations ............................................................ 36
International Trade Statistics Web Resources............................................................................. 37

Figures
Figure 1. Monthly U.S. Balances of Trade in Goods and Services, 2007-2011 ............................. 4
Figure 2. Month-End Trade-Weighted U.S. Dollar Against Broad, Major Currencies, and
Other Important Trading Partner Indices, January 2000-March 2011....................................... 10
Figure 3. The Exchange Value of the U.S. Dollar Compared with the Chinese Renminbi,
Japanese Yen, EU Euro, and South Korean Won..................................................................... 11
Figure 4. U.S. Merchandise Exports, Imports, and Trade Balance .............................................. 14
Figure 5. Annual Growth in U.S. Merchandise Exports and Imports, 1982-2010........................ 16
Figure 6. U.S. Current Account and Merchandise Trade Balances.............................................. 17
Figure 7. U.S. Merchandise Trade Balances With Selected Nations, 2010.................................. 20
Figure 8. U.S. Trade in High Technology Products .................................................................... 28
Figure 9. 2010 U.S. Automotive Trade by Major Segment ......................................................... 30
Figure 10. U.S. Trade Balance, Energy Balance, and No-Energy Balance .................................. 31
Figure 11. U.S. Balance of Merchandise Trade with FTA Partners in 2009 and 2010.................. 37

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Tables
Table 1. U.S. Total Goods Trade With All Countries .................................................................... 2
Table 2. U.S. Merchandise Exports, Imports, and Trade Balances on Census and Balance
of Payments Bases ................................................................................................................. 15
Table 3. U.S. Current Account Balances .................................................................................... 18
Table 4. U.S. Merchandise and Current Account Trade, 2006 to 2013 (Forecast)........................ 19
Table 5. U.S. Merchandise Trade Balances with Selected Nations and Groups ........................... 21
Table 6. Top U.S. Merchandise Deficit Trading Partners, 2010 .................................................. 22
Table 7. Top U.S. Trading Partners Ranked by Total Merchandise Trade in 2010 ....................... 24
Table 8. U.S. Current Account Balances With Selected U.S. Trading Partners, 2009 .................. 25
Table 9. U.S. Current Account Balance Flows with Selected U.S. Trade Partners, 2010 ............ 26
Table 10. U.S. Trade in Advanced Technology Products ............................................................ 28
Table 11. U.S. Trade in Motor Vehicles (Passenger Cars, Trucks, and Buses) and Parts by
Selected Countries, 2010........................................................................................................ 29
Table 12. U.S. Energy Trade with the World, 2008-2010 ........................................................... 32
Table 13. U.S. Imports of Crude Oil from Top 20 Countries, 2008-2010 .................................... 33
Table 14. U.S. Imports of Woven Apparel.................................................................................. 35
Table 15. Changes in U.S. Merchandise Trade Balances With Selected Countries and
Groups, 2007, 2008, and 2009................................................................................................ 36

Contacts
Author Contact Information ...................................................................................................... 38

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Most Recent Developments
In March 2011, the goods deficit increased $3.0 billion from February to $62.1 billion, and the
services surplus increased $0.2 billion to $13.9 billion. Exports of goods increased $7.1 billion to
$124.9 billion, and imports of goods increased $10.1 billion to $187.0 billion. Exports of services
were increased $0.5 billion to $47.7 billion, and imports of services increased $0.3 billion to
$33.8 billion. The goods and services deficit increased $2.8 billion from February 2011 to $48.2
billion in March. For the year from March 2010 to March 2011, goods and services exports were
up $22.4 billion, or 14.9%, and imports were up $31.1 billion, or 16.4%. Monthly balances are
graphed in Figure 1.
For the year 2010, U.S. merchandise exports to the world rose 21%, U.S. merchandise imports
rose 23%, and the U.S. trade balance rose 26%, from -$504 billion in 2009 to -$635 billion in
2010. The U.S. top export commodities during this period was civilian aircraft, engines and
equipment, down 4% from 2009, and refined petroleum products, up 47%. The top import
commodities remained crude oil and mineral fuels, up 35% followed by motor vehicles, up 42%.
The fuel deficit rose 26% from the previous year, although the energy deficit in 2009 shrank 48%
from 2008. With regard to countries, U.S. exports to China rose 32%; U.S. imports from China
rose 23%; and the U.S.-China trade deficit grew by 20%. The trend in U.S. merchandise trade in
2010 is that U.S. exports, U.S. imports, and the U.S. trade deficit are recovering from their
depressed 2009 levels, toward their higher 2008 levels.
The World Trade Organization issued a press release on April 7, 2011, on trade data from 2010
and forecasts for 2011, which was summarized by Oxford Analytica.
World goods exports volume will expand by 6.5% this year, the WTO forecast yesterday.
That would follow a record 14.5% rebound in 2010, which in turn came after a 12.0%
contraction in 2009. The forecast for this year is based on expected growth of 3.1% in global
output, following 3.6% in 2010. In 2010, developed-economy exports rose by more than
imports (12.9% against 10.7%, respectively). In developing countries and the CIS, exports
increased by 16.7%, while imports expanded by 17.9. Asia led global exports growth with
23.1% (28.4% in China and 27.5% in Japan), while South and Central America experienced
the largest jump in imports (22.7%). The WTO argued that trade growth could have been
even stronger without fiscal consolidation in Europe, high oil prices and unemployment
suppressing domestic demand in the OECD. Moreover, many protectionist policies adopted
in a number of countries since the crisis are still in place. Although such policies could
become ‘sticky’ and dent trade somewhat, the WTO framework limits governments’ options
for protecting their producers. The slowdown in trade expansion expected this year will
largely reflect a moderation in emerging-market growth.1
In 2009, as the global financial crisis worsened and the United States and other countries dropped
into recession, the declining U.S. trade deficit contributed positively to the growth in the U.S.
economy. The U.S. recession would have been worse without the shrinking U.S. trade deficit. As
the world is recovering from the great recession, countries are vying to capture the increase in
global trade by keeping the value of their currencies low, particularly China (see Figure 3). While
U.S. imports declined in 2009, they rose in 2010, forcing companies competing with imports to
continue to face diminished demand as the domestic economy remained sluggish. These

1 Oxford Analytica Combined Executive Summary April 8 2011.
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conditions create increased pressures on political forces to protect domestic industry from
imports, not only in the United States, but around the world.
The global financial crisis made 2009 a very difficult and negative year for the United States and
other developed market countries trade by any measurement metric. In 2009, U.S. merchandise
exports to the world declined by 18%, while U.S. imports from the world declined 26% relative
to the same time period’s 2008 values. Both flows reversed in 2010, with U.S. exports increasing
by 20.6%, and U.S. imports increasing by 22.9%. In 2009, the U.S. deficit in merchandise trade
dropped by about one-third, relative to 2008, to $504 billion, as the U.S. recession caused imports
to decline faster than exports. The U.S. merchandise deficit grew more negative in 2010 by
27.6%. Total U.S. trade, that is exports plus imports, fell 23% in goods and about 20% in goods
and services in 2009. In 2010 total U.S. trade in goods rose 22%. Trade in goods and services in
2010 rose 18.4%.
For 2010, imports of energy products rose by 30% to $354 billion and remain the U.S. top import
commodity. In 2009, imports of energy-related petroleum products fell by about one-half as
moderating prices for crude oil and weakening domestic demand for gasoline and other petroleum
products cut into the need for imports.
Trade in Goods
Table 1. U.S. Total Goods Trade With All Countries
(In millions of current U.S. dollars)
% Change
% Change
% Change
Description 2007 2008 2009 2010 2008/07
2009/08
2010/09
U.S.
Goods
Exports 1,160.4 1,304.9 1,068.5 1,288.7 12.5
-18.1
20,.6
U.S.
Goods
Imports 1,983.6 2,139.5 1,575.4 1,935.7
7.9
-26.4
22.9
U.S. Goods Balance
-823.2
-834.7
-506.9
-647.1
-1.4
39.3
-27.6
Source: U.S. Department of Commerce. Bureau of Economic Analysis and CRS.
Notes: Balance of Payments basis.
In 2010, the trade deficit in goods reached $647 billion on a balance of payments (BoP) basis,
less than the $835 billion in 2008 and or the $823 billion in 2007. On a bilateral basis, the 2010
deficit on merchandise trade with China was $273 billion (Census basis), with the European
Union was $80 billion, with Canada was $28 billion, with Japan $60 billion, and with Mexico
$66 billion. The balance with the Asian Newly Industrialized Countries (Hong Kong, South
Korea, Singapore, and Taiwan) switched from deficits in 2004 through 2007 to surpluses of $3.6
billion in 2009 and $14 billion in 2010.
Exports of goods of $1,288.7 billion in 2010 increased by $220.2 billion or 20.6% over the
$1,068.5 billion in 2009. This places the growth in exports on track to achieve a doubling over
five years as outlined in the President’s National Export Initiative. Exports of automotive vehicles
and parts rose by $30 billion or 36.9% and industrial supplies and materials rose by $98 billion or
31.7%. Imports of goods of $1,935.7 billion increased by $360.3 billion (18.6%) over 2009.
Increases in imports by sector were crude oil up $87 billion or 25%, automotive vehicles and
parts up $68 billion or 30%, and industrial supplies and materials up $146 billion or 23%. U.S.
exports and imports of goods began to decline in August 2008. This trend continued until exports
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of goods began to increase in May 2009 and imports began to increase in June. Monthly exports
had dropped from $114.7 billion in August 2008 to $80.0 billion in April 2009. Similarly,
monthly U.S. goods imports dropped from $186.8 billion in August 2008 to $119.2 billion in May
2009. This trend then reversed, with both exports and imports generally increasing as recovery
has progressed.
Trade in Services
In 2010, total annual imports of services of $ 394.2 billion and exports of $545.5 billion yielded a
surplus in U.S. services trade of $151.3 billion. The U.S. service industries, particularly financial
services, tourism, shipping, and insurance, tend to compete well in international markets. U.S.
services exports peaked in June 2008, at $47.2 billion. U.S. services imports likewise peaked in
August 2008 at $35.7 billion. Both flows declined through March 2009 and since have been
mainly increasing with monthly exports reaching $47.2 billion and imports reaching $33.6 billion
in February 2011.
Trade in Goods and Services
Since the United States runs a surplus in trade in services, the combined deficit on goods and
services is lower than the deficit on goods alone. In 2010, exports of goods and services of
$1,834.2 billion and imports of $2,329.9 billion resulted in a deficit of $495.7 billion, down from
$698.8 billion in 2008 and $374.9 billion in 2009.
For 2010, the annual trade deficit on goods and services amounted to approximately 3.4% of U.S.
gross domestic product (GDP, $14,660 billion in 2010), up from 2.6% in 2009 but down from
4.8% in 2008, 5.1% in 2007 and 5.8% in 2006. A level of 5% for countries is considered to be
cautionary by economic observers. At that level, other countries have experienced problems
paying for imports and maintaining the value of their currency. Given the “safe haven” effect
(investors seeking a safe investment) associated with U.S. Treasury securities, however, foreign
investors continue to buy U.S. securities. As a result, U.S. interest rates have remained relatively
low and despite the debate over the federal debt there seems to be little doubt concerning the
ability of the United States to finance the excess of imports over exports. The U.S. trade deficit,
however, does cause a weakening of the exchange value of the dollar.
Figure 1 shows U.S. trade balances in goods and in services by month for 2007-2009, and to date
for 2011. The monthly deficit on goods began in 2007 at $66 billion, rose to $79 billion in July
2008, dropped to $36 billion in May 2009, and since then has been increasing to around $60
billion in 2011. The monthly services balance has ranged between $9 billion and $13 billion and
has been at the all time high level of around $13 billion in 2011.2
This report provides an overview of the current status, trends, and forecasts for U.S. import and
export flows as well as certain balances. The purpose of this report is to provide current data and
brief explanations for the various types of trade flows along with a brief discussion of trends that
may require attention or point to the need for policy changes. The use of trade policy as an
economic or strategic tool is beyond the scope of this report but can be found in various other

2 Monthly trade data are available from the U.S. Bureau of Economic Analysis at http://www.bea.gov/newsreleases/
International/trade/2008/pdf/trad0808.pdf.
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CRS reports.3 Further detail on trade in specific commodities, with particular countries or regions,
or for different time periods, can be obtained from the Department of Commerce,4 U.S.
International Trade Commission,5 or by contacting the authors of this report.
Figure 1. Monthly U.S. Balances of Trade in Goods and Services, 2007-2011
(In billions of current dollars)

Source: CRS with data from U.S. Bureau of Economic Analysis on a balance of payments basis.
International Trade and U.S. Trade Policy
International trade in goods and services along with flows of financial capital affect virtually
every person living in the United States. Whether one buys imported clothes, gasoline, computers
or cars; works in an industry that competes with imports; or sells products abroad, the influence
of international trade on economic activity is pervasive. Although the United States is one of the
three largest exporters in the world (China and Germany are the other two), U.S. sales abroad are
overshadowed by the huge demand by Americans for imported products. Since 1976, the United

3 See, for example, CRS Report R41145, The Future of U.S. Trade Policy: An Analysis of Issues and Options for the
112th Congress, by William H. Cooper; CRS Report RL33743, Trade Promotion Authority (TPA) and the Role of
Congress in Trade Policy, by J. F. Hornbeck and William H. Cooper; CRS Report RL31356, Free Trade Agreements:
Impact on U.S. Trade and Implications for U.S. Trade Policy, by William H. Cooper; CRS Report RL31832, The
Export Administration Act: Evolution, Provisions, and Debate, by Ian F. Fergusson, CRS Report RL33550, Trade
Remedy Legislation: Applying Countervailing Action to Nonmarket Economy Countries, by Vivian C. Jones, CRS
Report RS20088, Dispute Settlement in the World Trade Organization (WTO): An Overview, by Jeanne J. Grimmett, or
CRS Report RL33274, Financing the U.S. Trade Deficit, by James K. Jackson.
4 Commerce Department data are available at http://www.bea.gov/.
5 U.S. International Trade Commission data are available at http://dataweb.usitc.gov/.
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States has incurred continual merchandise trade deficits with annual amounts increasing steadily
until the plateau of years 2005 through 2008. Then in 2009 the U.S. trade deficit on goods
declined roughly 39% and in 2010 rose, or worsened, by 28% (see Table 1).
For Congress, the trade deficit and other aspects of international trade enter into public policy
considerations through many portals. At the macroeconomic level, trade deficits are a concern
because they affect U.S. economic growth, interest rates, labor, and the debt load of the economy.
As the trade deficit rises relative to the total economy, the risk increases that the dollar will
weaken, prices will rise, financial markets will be disrupted, and the economic well-being of the
population will be reduced. A large trade deficit, however, naturally follows a booming economy
as robust domestic demand generates purchases of both domestic and imported goods. On the
strategic level, trade ties often lead to a deepening of bilateral relations with other nations that can
develop into formal free trade agreements or political and security arrangements. Trade also can
be used as a tool to accomplish strategic objectives—particularly through providing preferential
trading arrangements or by imposing trade sanctions.
On the microeconomic side, imports of specific products can generate trade friction and pressures
from constituent interests for the government to shield U.S. producers from foreign competition,
provide adjustment assistance, open foreign markets, or assist U.S. industries to become more
competitive. At the household level, rising trade deficits and free trade agreements often are
associated with the loss of jobs, an issue of high concern to the American public. For example, in
November 2009, the Pew Research Center found that 85% of the respondents in a survey said that
protecting jobs should be a top foreign policy priority and that economic issues were the greatest
international problem confronting the United States, followed closely by the wars in Afghanistan
and Iraq. As for free trade agreements, 43% said that they were good for the country while 32%
said that they were bad. In the Pew survey, 53% thought free trade agreements lead to job losses,
49% to lower wages, and 42% to slower economic growth.6
The Obama Administration did not articulate its policy on trade until March 2010, arguably
because of the urgency of dealing with the global financial crisis and the push for health care
legislation. Until then, most of U.S. trade policy relied on existing mechanisms to protect
American industries from unfair trade and from surges in imports (increased tariffs on imports of
tires from China) and on taking no action on pending free-trade agreements with Columbia,
Panama, and South Korea. In March 2010, following the passage of the health care legislation,
the Administration began to turn its attention to other pressing issues, including international
trade policy.
On March 3, 2010, the President sent his trade policy agenda to Congress. It included the
following:
• Support and strengthen a rules-based trading system (support an ambitious and
balanced Doha agreement that liberalizes agriculture, goods and services);
• Enforce rights in the rules-based trading system (strengthen monitoring and
enforcement, use the WTO dispute settlement process, increase focus on nontariff
barriers, and enforce labor and environmental rights in trade agreements);

6 Pew Research Center for the People and the Press. “U.S. Seen as Less Important, China as More Powerful,
Isolationist Sentiment Surges to Four-Decade High,” Survey Reports, December 3, 2009.
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• Enhance U.S. growth, job creation and innovation (emphasize relations with
emerging markets and key trade partners, pursue regional engagement,
particularly negotiation of a Trans-Pacific Partnership Agreement);
• Work to resolve outstanding issues with pending free trade agreements (FTAs)
and build on existing agreements (resolve issues with and implement pending
FTAs with Panama, Colombia, and South Korea and strengthen relationships
with current trading partners such as Canada, Mexico, Japan, and the European
Union);
• Facilitate progress on national energy and environmental goals; and
• Foster stronger partnerships with developing and poor nations.
The Administration also is exploring the possibility of negotiating a multilateral agreement
providing for free trade in environmental goods and for removing nontariff barriers to
environmentally friendly services. The Administration’s Trade Policy Agenda also includes a
National Export Initiative that aims to double U.S. exports over the next five years. In 2010,
exports increased by 20.6%, albeit from a low point during the global financial crisis. The
Initiative’s particular focus is on assisting small- and medium-sized enterprises to export more.
The Administration also had indicated that it intends to submit legislation to implement the
Korea-U.S. FTA and the U.S.-Panama FTA.
In Congress, Members have expressed both support and opposition to the three pending free trade
agreements (FTAs). The specific points cited in opposition to the FTAs include anti-labor
activities in Columbia, potential tax havens in Panama, and the protected automobile and beef
markets in South Korea. However, in the background seems to be a general reluctance to approve
any FTAs at all unless they are seen to create jobs and meet certain labor and environmental
standards. On April 20, 2010, Senators Max Baucus and Charles E. Grassley of the Senate
Finance Committee sent a letter to the President urging effort to resolve issues relating to South
Korean imports of beef and automobiles in order to win broad approval of the Korea-U.S. FTA.
On March 10, 2010, Senators John Kerry and Dick Lugar of the Senate Foreign Relations
Committee also sent a letter to the President urging the Administration to settle the issues holding
up the Korea-U.S. FTA.7 On June 26, 2010, President Obama announced that he was instructing
U.S. Trade Representative Ron Kirk to negotiate with Korea to resolve outstanding issues on the
pending U.S.-Korea free trade agreement prior to the Group of 20 meeting in November, after
which the FTA would be presented to Congress if the problems are solved.8 As of the end of
April, 2011, implementing legislation has not been introduced for any of the three FTAs. Other
trade policy issues in Congress have been China’s undervalued currency, trade enforcement,
consumer safety for imported goods, and environmental protection as it relates to trade.
Numerous bills in Congress address issues relate to trade. For example:
• S. 380, the Andean Trade Preference Extension Act of 2011, seeks to reauthorize
the Andean Trade Preference Act (ATPA), as a separate item. ATPA provides

7 Ian Swanson, Baucus, Grassley want action on South Korea trade deal, The Hill’s Blog Briefing Room, April 20,
2010. Kerry, Lugar Urge Administration To Move Forward On The U.S.-Korean Trade Agreement , Senate Foreign
Relations Committee Press Release, May 10, 2010.
8 “Obama Says Korea FTA to Move Forward; Resolve Issues by November G-20 Meeting,” International Trade
Reporter, 27 ITR 970, July 1, 2010.
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preferential tariff treatment to designated imported goods from Colombia and
Ecuador.
• S. 433/H.R. 913 Free and Fair Trade Act of 2011, would extend the Generalized
System of Preferences (GSP) and ATPA through June, 2012, and revoke
eligibility for sleeping bags from GSP. GSP provides duty-free entry for up to
4,800 products from 129 specified countries.
• S. 308, Trade Extenders Act of 2011, would extend trade adjustment assistance
(TAA) programs through June 30, 2012. Extends TAA for firms and farmers
through June 30, 2013.
• H.R. 639/S. 328, the Currency Reform for Fair Trade Act, aim to make
undervalued currencies, such as the Chinese yuan, a countervailable subsidy,
which could receive remedial action from the U.S. Department of Commerce.
H.R. 639, with 125 House cosponsors, seems to have considerable House
support.
• H.R. 1655, the Stop Iran’s Nuclear Weapons Program Act of 2011, seeks to
expand existing sanctions against Iran. It is the first introduced bill concerning
export controls and Iran sanctions, in the 112th Congress. More are under
consideration.
• H.R. 29, To provide for the withdrawal of the United States from the North
American Free Trade Agreement.
• H.R. 516, Bring Jobs Back to America Act, would direct the Secretary of
Commerce to create a comprehensive national manufacturing strategy to increase
overall domestic manufacturing, create private sector jobs, identify emerging
technologies, and identify a strategy for repatriating jobs to the United States.
• H.R. 554, Freedom Trade Act, would deny nondiscriminatory treatment (normal
trade relations treatment) from the products of a foreign country that (1) engages
in violations of religious freedom, (2) restricts the freedom of workers to
associate and to organize and bargain collectively, or (3) prohibits or limits the
functioning of free and independent labor unions.
• H.R. 833, Agricultural Export Enhancement Act of 2011, seeks to define
“payment of cash in advance” as the payment by the purchaser of an agricultural
commodity or product and the receipt of such payment by the seller prior to (1)
the transfer of title of such commodity or product to the purchaser, and (2) the
release of control of such commodity or product to the purchaser. Would prohibit
the President from restricting direct transfers from a Cuban financial institution
to a U.S. financial institution executed in payment for a product authorized for
sale under such Act.
• S. 98, Creating American Jobs through Exports Act of 2011, Expresses the sense
of Congress that the President should: (1) continue the National Export Initiative
to increase global export and investment opportunities for U.S. businesses that
create jobs in the United States; and (2) submit the United States-Korea Free
Trade Agreement, the United States-Colombia Trade Promotion Agreement, and
the United States-Panama Trade Promotion Agreement to Congress, and
Congress should approve them, to create U.S. jobs and stimulate the economy by
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eliminating trade barriers faced by U.S. exports that result in loss of jobs in the
United States.
• S. 708, Trade Enforcement Priorities Act, seeks to renew and extend the
provisions relating to identification of trade enforcement priorities.
The Trade Deficit and the Dollar
Overall U.S. trade deficits reflect a shortage of savings in the domestic economy and a reliance on
capital imports to finance that shortfall. A savings shortfall is the analogue of excessive spending
that is financed by borrowing. Households borrow for consumption; businesses borrow to invest;
and the government borrows to cover its budget deficit. At the international transaction level, the
savings shortfall is manifest when the United States imports capital to pay for its excess of
imports (trade deficit).
Whether this foreign borrowing is beneficial for the U.S. economy depends on how the imports of
capital are used. If they are used to finance investments that generate a future return at a
sufficiently high rate (they raise future output and productivity), then they may increase the well-
being of current and future generations. However, if the imports are used only for current
consumption, the net effect of the borrowing will be to shift the burden of repayment to future
generations without a corresponding benefit to them.
U.S. trade balances are macroeconomic variables that may or may not indicate underlying
problems with the competitiveness of particular industries or what some refer to as the
competitiveness of a nation. The reason is that overall trade flows are determined, within the
framework of institutional barriers to trade and the activities of individual industries, primarily by
macroeconomic factors such as rates of growth, savings and investment behavior (including
government budget deficits/surpluses), international capital flows, and exchange rates.9
Increases in trade deficits may diminish economic growth, since net exports (exports minus
imports) are a component of gross domestic product. In the late 1980s and early 1990s, export
growth was an important element in overall U.S. economic growth. In 2008, merchandise exports
accounted for about 9% of GDP, compared with 5.9% in 1990. In 2009, as trade deficits declined,
they provided some help to the ailing economy. As the trade deficit has risen in 2010, it is
providing a drag on the economic recovery. It should be noted, however, that a large trade deficit
naturally follows a booming economy, as increases in domestic demand lead to more purchases of
imported goods.
Many economists fear that the rising U.S. trade and current account10 deficits could lead to a large
drop in the value of the U.S. dollar. The current account deficit, while decreasing from 6.0% of
GDP in 2006 to 5.2% of GDP in 2007, 4.9% in 2008, and 2.9% in 2009, but rising to 3.4% in
2010, has placed downward pressure on the dollar, although the “safe haven” effect comes into
play to have the opposite effect. A weaker dollar boosts exports by making them cheaper,
narrowing the U.S. trade deficit. Compared to a Federal Reserve index of major currencies

9 For further information on trade deficits and the macroeconomy, see CRS Report RL33274, Financing the U.S. Trade
Deficit, by James K. Jackson, and CRS Report RL33186, Is the U.S. Current Account Deficit Sustainable?, by Marc
Labonte.
10 U.S. trade in goods and services plus net flows of investment income and remittances.
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weighted by importance to U.S. trade, the dollar lost one-third of its value since 2002 (see Figure
2). The dollar had fallen against the euro, yen, British pound, Australian dollar, and Canadian
dollar. In fact, the U.S. dollar fell to parity with the Canadian loonie in September 2007 for the
first time in 30 years, but between July and November 2008, the U.S. dollar strengthened against
other currencies as the global financial crisis increased “safe haven demand” for the dollar. Since
November 2009, the dollar lost some value, partly due to the Federal Reserve’s lowering of
interest rates, but as the Eurozone debt crisis developed in 2010, global investors again sought the
safety of U.S. Treasury securities and bid up the price of dollars, but that surge was temporary.
The Economist Intelligence Unit recently reviewed the problems involved with currency
misalignment and trade imbalances:
tensions come against a related backdrop of continued trade imbalances. In particular, China
and some other leading exporters are running very large trade surpluses, offset by sizeable
deficits elsewhere, leading to the surplus countries accumulating massive foreign-exchange
reserves. These imbalances reflect in part exchange-rate mismatches. The prospect,
following the crisis, of weaker consumer demand in some deficit countries means that
consumer demand in surplus countries needs to rise to compensate if strong global growth is
to resume—in other words, imbalances need to be addressed. The IMF warned in its latest
report on the global economy that rebalancing was vital and was proceeding too slowly.
The fall in global trade as a result of the economic crisis went some way towards correcting
imbalances, but the fundamental pattern persists. China’s current-account surplus, for
example, fell from 11% of GDP in 2007 to 6% in 2009, but the Economist Intelligence Unit
forecasts that the surplus will narrow only modestly this year, to just under 5% of GDP. And
we think the US current-account deficit, despite having fallen to 2.7% of GDP last year, will
actually widen to 3.9% of GDP in 2010. It will remain at about that level in 2011-14.11

11 ViewsWire, Economist Intelligence Unit. “World Economy: Co-operation Lacking As Imbalances Persist.” October
11, 2010.
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Figure 2. Month-End Trade-Weighted U.S. Dollar Against Broad, Major Currencies,
and Other Important Trading Partner Indices, January 2000-March 2011

Source: Federal Reserve Bank of St. Louis, http://research.stlouisfed.org/.
Notes: Broad Index (January 1997 = 100): Euro Area, Canada, Japan, Mexico, China, United Kingdom,
Taiwan, Korea, Singapore, Hong Kong, Malaysia, Brazil, Switzerland, Thailand, Philippines, Australia, Indonesia,
India, Israel, Saudi Arabia, Russia, Sweden, Argentina, Venezuela, Chile and Colombia.
Major Currencies Index (January 1973 = 100): Euro Area, Canada, Japan, United Kingdom, Switzerland,
Australia, and Sweden.
Other Important Trade Partners Index (January 1997 = 100): Mexico, China, Taiwan, Korea, Singapore,
Hong Kong, Malaysia, Brazil, Thailand, Philippines, Indonesia, India, Israel, Saudi Arabia, Russia, Argentina,
Venezuela, Chile and Colombia.
Although a weakened dollar helps to reduce U.S. trade imbalances, it also may reduce the dollar’s
attractiveness to foreign investors. If foreign investors stop offsetting the deficit by buying dollar-
denominated assets, the value of the dollar could drop—possibly precipitously. In that case, U.S.
interest rates would have to rise to attract more foreign investment; financial markets could be
disrupted; and inflationary pressures could increase. As shown in Figure 2, in terms of individual
currencies, since January 2008, the dollar has been weakening with respect to the Japanese yen
and Chinese renminbi but strengthening with respect to the euro and South Korean won.
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Figure 3. The Exchange Value of the U.S. Dollar Compared with the Chinese
Renminbi, Japanese Yen, EU Euro, and South Korean Won
January 2008 Through April 2011



Source: © 2011 by Prof. Werner Antweiler, University of British Columbia, Vancouver BC, Canada, and
PACIFIC Exchange Rate Service. Permission is granted to reproduce the above image.
Note: Time period shown in diagram: January 1, 2008 - April 20, 2011.
Currently, foreign investment in dollar assets along with purchases of securities by investors
seeking a safe haven as well as from central banks of countries such as China have bolstered the
value of the dollar. China’s central bank has intervened in currency markets to keep its exchange
rate relatively stable. 12 As a result, as of February 2011 China held $1.1 trillion in U.S. Treasury
securities. 13 As for Japan, following the March 2011 earthquake and tsunami, central banks
intervened to buy dollars to decrease the value of the yen. As of February 2011, Japan held $890
billion U.S. Treasury securities.14
A recent development in foreign country holdings of dollars and other reserve currencies is that
some are turning toward creating sovereign wealth funds (SWFs). These are funds owned by
governments that are invested in stocks, bonds, property, and other financial instruments

12 Statistics on Chinese international reserves are available from the Chinability website, a non-profit website that
provides Chinese economic and business data and analysis, at http://www.chinability.com/.
13 Statistics on foreign holdings of U.S. Treasury securities are available at http://www.treasury.gov/tic/mfh.txt. For
further information, see CRS Report RS22331, Foreign Holdings of Federal Debt, by Justin Murray and Marc Labonte.
14 Statistics on Japanese international reserves are released on a monthly basis by the Japanese Ministry of Finance and
available at https://www.mof.go.jp/english/.
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denominated in dollars, euros, or other hard currency. For China, Japan, South Korea, Russia, and
the oil-exporting nations of the Persian Gulf, the source of capital for these funds is coming from
governmental holdings of foreign exchange. For China and Japan, for example, foreign exchange
reserves have traditionally been invested by their respective central banks primarily in low-
yielding but low-risk government bonds (i.e., U.S. Treasury securities). The purpose of sovereign
wealth funds is to diversify investments and to earn a higher rate of return. For example, in
September 2007, China created a sovereign wealth fund—the China Investment Corporation
(CIC)—with initial capital of $200 billion. Depending on how these funds are managed and what
leverage they acquire, they could affect U.S. interest rates (foreign purchases of U.S. Treasury
securities tend to reduce U.S. interest rates), corporate activities (if funds buy significant voting
shares of companies), and foreign access to technology and raw materials. The U.S. trade deficit
provides some of the foreign exchange that goes to finance these sovereign wealth funds.15
How long can the United States keep running trade deficits? U.S. deficits in trade can continue
for as long as foreign investors are willing to buy and hold U.S. assets, particularly government
securities and other financial assets.16 Their willingness depends on a complicated array of factors
including the perception of the United States as a safe haven for capital, relative rates of return on
investments, interest rates on U.S. financial assets, actions by foreign central banks, and the
savings and investment decisions of businesses, governments, and households. The policy levers
that influence these factors that affect the trade deficit are held by the Federal Reserve17 (interest
rates) as well as both Congress and the Administration (government budget deficits and trade
policy), and their counterpart institutions abroad.
In the 112th Congress, legislation directed at the trade deficit has been taking several strategies.
Some bills address trade barriers by particular countries, particularly China. Others are aimed at
preventing manipulation of exchange rates or at imposing import duties to compensate for the
arguably undervalued Chinese currency.18 Some legislation is listed at the beginning of this report
and tracked in greater detail in other CRS reports dealing with trade.
Types of Trade Data
The U.S. government compiles trade data in four different ways. The data on merchandise trade
are first compiled on a Census basis. Bilateral trade with countries and sectoral data are reported
only on a Census basis. The Census numbers are then adjusted and reported monthly on a balance
of payments (BoP) basis that includes adjustments for valuation, coverage, and timing, and
excludes military transactions. The data are finally reported in terms of national income and
product accounts (NIPA). The NIPA data also can be further adjusted to include correcting for
inflation to gauge movement in trade volumes as distinct from trade values. Conceptually, this

15 For more information on sovereign wealth funds, see CRS Report RL34336, Sovereign Wealth Funds: Background
and Policy Issues for Congress, by Martin A. Weiss, CRS Report RL34337, China’s Sovereign Wealth Fund, by
Michael F. Martin.
16 See Mann, Catherine L. Is the U.S. Trade Deficit Sustainable? Washington, Institute for International Economics,
1999. 224 p. See also CRS Report RL33274, Financing the U.S. Trade Deficit, by James K. Jackson, and CRS Report
RS21951, Financing the U.S. Trade Deficit: Role of Foreign Governments, by Marc Labonte.
17 For details, see CRS Report RS20826, Structure and Functions of the Federal Reserve System, by Marc Labonte.
18 For legislation related to trade with China and the Chinese currency, see CRS Report RL33536, China-U.S. Trade
Issues, by Wayne M. Morrison, and CRS Report RL32165, China’s Currency: Economic Issues and Options for U.S.
Trade Policy, by Wayne M. Morrison and Marc Labonte.
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procedure is analogous to adjusting macroeconomic data from nominal to real values. Specific
values help in understanding the concepts involved.
Valuation methods are very important in trade data evaluation. The Census Bureau also reports
imports on a c.i.f. (cost, insurance, and freight) basis which includes the value of insurance,
international shipping, and other charges incurred in bringing merchandise to U.S. ports of entry.
The customs (or f.a.s.—free alongside ship) data do not include these supplementary costs. U.S.
import data are reported on a customs basis with insurance and freight charges counted in U.S.
services trade. Other countries, however, commonly report merchandise import figures that
include insurance and freight charges. This tends to overstate their imports and understate their
trade surpluses with the United States.
U.S. Merchandise Trade Balance
The merchandise (goods) trade balance is the most widely known and frequently used indicator of
U.S. international economic activity. In 2010, total U.S. merchandise trade amounted to $3,190.2,
a 22% increase from 2009. In 2009 total U.S. merchandise trade amounted to $2,614.8 billion, a
22.9% decrease from $3,391.1 billion in 2008. Merchandise exports in 2010 totaled $1,278.1
billion, while imports reached $1,912.1 billion (Census basis). The U.S. merchandise trade deficit
fell massively from -$816 billion in 2008 to -$503 billion in 2009 but then increased to $634
billion in 2010. (See Figure 4.)
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Figure 4. U.S. Merchandise Exports, Imports, and Trade Balance
$ Billions
2500
2250
2000
U.S. Exports
1750
1500
U.S. Imports
1250
1000
750
500
250
0
-250
-500
Trade Balance
-750
-1000
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Year

Source: CRS with Census basis data from U.S. Bureau of Economic Analysis http://www.bea.gov/.
U.S. merchandise exports (as shown in Table 2 and Figure 5) decreased in 2001 and 2002 in
response to the global slowdown, but generally have been increasing each year. As shown in
Figure 5, the growth of imports has also been steady, although they too fell by 6.4% in 2001
before recovering in 2002. In 2003, import growth was nearly double export growth, although in
2004, export growth almost caught up with that of imports, and in 2005, the rate of increase for
both dropped slightly. Growth in exports and imports slowed in 2007 with exports rising by
12.3% and imports by 5.7%. Likewise in 2008, exports grew faster than imports (12.4% vs 7.3%),
but the trade deficit still increased. This is because U.S. imports are about 63% greater than U.S.
exports, so exports must grow about 63% faster than imports just for the deficit to remain
constant. Then in 2009, with the full force of the financial crisis, exports decreased slower than
imports (-17.9% vs -25.9%), before each took a sharp upward turn in 2010 as recovery began.
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Table 2. U.S. Merchandise Exports, Imports, and Trade Balances on Census and
Balance of Payments Bases
(In billions of current U.S. dollars)

Census basis
Balance of Payments basis
Exports
Imports
Trade
Exports
Imports
Trade
Year
(f.a.s.)a
(customs)b
Balance
(f.a.s.)a
(customs)b
Balance
1982 212.3 243.9
-31.6 211.2 247.6
-36.4
1983 201.7 261.7
-60.0 201.8 268.9
-67.1
1984 218.7 330.5 -111.8 219.9 332.4 -112.5
1985 212.6 336.4 -123.8 215.9 338.1 -122.2
1986 226.4 365.7 -139.3 223.3 368.4 -145.1
1987 253.9 406.3 -152.4 250.2 409.8 -159.6
1988 323.3 441.9 -118.6 320.2 447.2 -127.0
1989 362.9 473.4 -110.5 359.9 477.7 -117.8
1990 392.9 495.2 -102.3 387.4 498.4 -111.0
1991 421.8 487.1
-65.3 414.1 491.0
-76.9
1992 448.2 532.6
-84.4 439.6 536.5
-96.9
1993 464.8 580.5 -115.7 456.9 589.4 -132.5
1994 512.6 663.2 -150.6 502.9 668.7 -165.8
1995 584.7 743.5 -158.8 575.2 749.4 -174.2
1996 625.1 795.3 -170.2 612.1 803.1 -191.0
1997 689.2 869.7 -180.5 678.4 876.8 -198.4
1998 682.1 911.9 -229.8 670.4 918.6 -248.2
1999 695.8 1,024.6 -328.8 698.0
1034.3 -336.3
2000 781.9 1,218.0 -436.1 784.2
1230.4 -446.2
2001 729.1 1,141.0 -411.9 730.3
1152.3 -422.0
2002 693.1 1,161.4 -468.3 696.3
1171.6 -475.3
2003 724.8 1,257.1 -532.3 728.3
1269.8 -541.5
2004 818.9 1,469.7 -654.8 819.9
1485.5 -665.6
2005 901.1 1,673.5 -772.4 909.0
1692.8 -783.8
2006 1,026.0 1,853.9
-828.0 1035.9 1875.3
-839.5
2007 1,148.2 1,957.0
-808.8 1160.4 1983.6
-823.2
2008 1,287.4 2,103.6
-816.2 1304.9 2139.5
-834.7
2009 1,056.0 1,559.6
-503.6 1,068.5 1,575.4
-506.9
2010 1,277.5 1,912.1
-634.6 1,288.7 1,935.7
-647.1
Source: U.S. Department of Commerce, Bureau of Economic Analysis, U.S. International Transactions Accounts
Data.
Note: Goods on a Census basis are adjusted to a BoP basis to include changes in ownership that occur without
goods passing into or out of the customs territory of the United States, to eliminate duplication, and to value
transactions according to a standard definition. Export adjustments include counting military sales as services not
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goods, adding private gift parcels, and foreign official gold sales from U.S. private dealers. Import adjustments
include adding in inland freight in Canada and foreign official gold sales to U.S. private dealers, and subtracting
imports by U.S. military agencies.
a. Exports are valued on an f.a.s. basis, which refers to the free alongside ship value at the port of export and
generally include inland freight, insurance, and other charges incurred in placing the goods alongside the
carrier at the port of exportation.
b. Imports are valued as reported by the U.S. Customs Service, known as Customs basis, and exclude import
duties, the cost of freight, insurance, and other charges incurred in bringing merchandise to the United
States.
Figure 5. Annual Growth in U.S. Merchandise Exports and Imports, 1982-2010
Percent
30
25
Export
Import
20
Growth
Growth
15
10
5
0
-5
-10
-15
-20
-25
-30
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Year

Source: Underlying data from U.S. Department of Commerce.
Current Account Balance
The current account provides a broader measure of U.S. trade because it includes services,
investment income, and unilateral transfers in addition to merchandise trade (see Table 2). The
balance on services includes travel, transportation, fees and royalties, insurance payments, and
other government and private services. The balance on investment income includes income
received on U.S. assets abroad minus income paid on foreign assets in the United States.
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Unilateral transfers are international transfers of funds for which there is no quid pro quo. These
include private gifts, remittances, pension payments, and government grants (foreign aid). Data
on the current account are announced several months later than those on trade in goods and
services.
Figure 6. U.S. Current Account and Merchandise Trade Balances
(In billions of current U.S. dollars)
200
Actual
Forecast
0
-200
-400
-600
Goods Trade
-800
Current Account
-1000
97 98 99 2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Year

Sources: CRS with data from U.S. Bureau of Economic Analysis, U.S. International Transactions Account.
Forecasts from IHS Global Insight.
Note: Merchandise trade data on Census basis.
Table 3 summarizes the components of the U.S. current account. In 2010, the U.S. deficit on
current account rose to $470.2 billion from $378.4 billion in 2009. It was down considerably,
however, from $802.6 billion in 2006. The 2010 deficit on current account amounted to 3.4% of
GDP, below the 4.9% in 2008 and less than the 5% level of caution used by the International
Monetary Fund. Since the dollar is used as an international reserve currency, the United States
can run trade deficits without the same downward pressure on the value of the dollar as other
nations. Historically, the current account deficit fell from a then record-high $160.7 billion in
1987 to $79.0 billion in 1990, and switched to a $3.7 billion surplus in 1991 (primarily because of
payments to fund the Gulf War by Japan and other nations). However, since a slight decline in
1995, the current account deficit has been increasing significantly except for a slight dip in 2001
because of the U.S. recession and a similar situation in 2007 and 2008 before the large rise in
2009.
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Table 3. U.S. Current Account Balances
(In billions of current U.S. dollars)
Merchandise
Investment
Net
Current
Calendar
Trade
Services
Income
Unilateral
Account
Year
Balancea
Balanceb
Balancec
Transfersd
Balancee
1985 -122.2 0.3 25.7 -22.0 -118.2
1986 -145.1 6.5 15.5 -24.1 -147.2
1987 -159.6 7.9 14.3 -23.3 -160.7
1988 -127.0 12.4 18.7 -25.3 -121.2
1989 -117.7 24.6 19.8 -26.2 -99.5
1990 -111.0 30.2 28.6 -26.7 -79.0
1991 -76.9 45.8 24.1 9.9 2.9
1992 -96.9 57.7 24.2 -35.1 -50.1
1993 -132.5 62.1 25.3 -39.8 -84.8
1994 -165.8 67.3 17.1 -40.3 -121.6
1995 -174.2 77.8 20.9 -38.1 -113.6
1996 -191.0 86.9 22.3 -43.0 -124.8
1997 -198.4 90.2 12.6 -45.1 -140.7
1998 -248.2 82.1
4.3 -53.2 -215.1
1999 -347.8 82.7 13.9 -50.4 -300.8
2000 -454.7 74.9 21.1 -58.6 -416.4
2001 -429.5 64.4 31.7 -51.3 -397.2
2002 -485.0 61.2 27.4 -64.9 -458.1
2003 -550.9 54.0 45.3 -71.8 -520.7
2004 -665.6 56.3 67.2 -88.4 -630.5
2005 -783.8 69.6 72.4 -105.8 -747.6
2006 -839.5 80.2 48.1 -91.5 -802.6
2007 -823.2 121.1 99.6 -115.5 -718.1
2008 -834.7 135.9 152.0 -122.0 -668.9
2009 -506.9 132.0 121.4 -124.9 -378.4
2010 -647.1 151.4 163.0 -137.5 -470.2
Source: U.S. Bureau of Economic Analysis, U.S. International Transactions.
a. On a BoP basis.
b. Includes travel, transportation, fees and royalties, insurance payments, other government and private
services, and investment income.
c. Income receipts on U.S. assets abroad minus income payments on foreign assets in the United States.
d. International transfers of funds, such as private gifts, pension payments, and government grants for which
there is no quid pro quo.
e. The trade balance plus the service balance plus investment income balance plus net unilateral transfers,
although conceptually equal to the current account balance, may differ slightly as a result of rounding.
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Because the merchandise trade balance comprises the greater part of the current account, the two
tend to track each other. Unlike the merchandise trade balance, however, the services account has
registered surpluses. Since Americans are such large investors in foreign economies, the United
States traditionally also has a surplus in its investment income ($163 billion in 2010), but the
deficit in unilateral transfers (primarily dollars sent abroad by foreign workers and recent
immigrants) totaled $137.5 billion in 2010. Unilateral transfers have now reached more than
triple the level of the late 1980s.
Forecasts
According to IHS Global Insight, Inc., a leading U.S. economic forecasting firm, in 2008 the U.S.
merchandise (goods) trade deficit is projected to decline to about $931.9 billion on a balance of
payments basis and to stay at that level for 2009 and 2010 (see Table 4 and Figure 6). The
current account deficit is forecast to increase to $557 billion 2011 and remain at about that level
for the next two years.
Table 4. U.S. Merchandise and Current Account Trade, 2006 to 2013 (Forecast)
(In billions of current U.S. dollars)

2006 2007 2008 2009 2010 2011F 2012F 2013F
Merchandise Trade
Exports

Actual 1035.9
1,160.4
1,304.9
1,068.5
1,288.7 — — —

Forecasted
—
—
—
—
— 1,527.4 1,703.7 1,876.9
Imports

Actual 1,875.3
1,983.6
2,139.5
1,575.4
1,935.7 — — —

Forecasted
—
—
—
—
— 2,250.8 2,438.4 2,558.8
Trade Balance


Actual -839.5
-823.2
-834.7
-506.9
-647.1 — — —

Forecasted
—
— —
—
— -723.4 -734.7 -681.9
Services Trade Balance

Actual 80.2
121.1
135.9
132.0
151.4 — — —

Forecasted — — —
—
— 171.4 183.6 196.9
Current Account Balance

Actual -802.6
-718.1
-668.9
-378.4
-470.2 — — —

Forecasted
—
— —
—
— -557.0 -558.6 -569.1
Sources: (BoP basis). U.S. Bureau of Economic Analysis; and IHS Global Insight (searched August 18, 2010).
Note: “F” indicates forecast.
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U.S. Trade with Selected Nations
The overall U.S. merchandise trade balance consists of deficits or surpluses with each trading
partner. Many economists view the overall figure as more significant than bilateral trade balances,
since rising deficits with some nations are often offset by declining deficits or growing surpluses
with others. Nonetheless, abnormally large or rapidly increasing trade deficits with particular
countries are often viewed as indicators that underlying problems may exist with market access,
the competitiveness of particular industries, currency misalignment, or macroeconomic
adjustment. Figure 7 and Table 4 and Table 5 show U.S. trade balances with selected nations.
Figure 7. U.S. Merchandise Trade Balances With Selected Nations, 2010
Country
China
-273
Mexico
-66
Japan
-60
Germany
-34
Canada
-28
Ireland
-27
Nigeria
-26
Venezuela
-22
Saudi Arabia
Deficit
-20
Russia
-20
Italy
-14
Thailand
-14
Algeria
-13
Malaysia
-12
France
-12
Vietnam
-11
Chile
4
Egypt
5
Panama
6
Turkey
6
Belgium
10
United Arab Emirates
10
Brazil
Surplus
11
Singapore
12
Australia
13
Netherlands
16
Hong Kong
22
-350
-300
-250
-200
-150
-100
-50
0
50
$ Billions

Source: CRS with data from the U.S. Department of Commerce (Census basis).
Most of the U.S. trade deficit can be accounted for by trade with China, Mexico, Japan, Germany,
Ireland, and Canada. Trade with the oil exporting countries, particularly Venezuela, Nigeria, and
Saudi Arabia, also is in deficit. U.S. trade surpluses occur in trade with Hong Kong, the
Netherlands, Australia, and the United Arab Emirates.
The U.S. trade deficit with China has soared over the past decade: from $32 billion in 1995 to
$100 billion in 2000, then $227 billion in 2009, and $273 billion in 2010. The negative net
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balance in trade with China has grown to account for about 40% of the total U.S. trade deficit.19
The U.S. trade deficit with China exceeded that with Japan for the first time in the year 2000 and
now is more than four times as large.
China claims that its trade is less imbalanced than U.S. data indicate. Chinese trade data differ
from those of the United States primarily because of the treatment of Hong Kong as an entrepot.
Although Hong Kong reverted back to China in 1997, it is a separate customs area from mainland
China, and Beijing counts Hong Kong as the destination for its exports sent there, even though
the goods may be transshipped to other markets. For example, China would count a laptop
computer that is assembled in Shanghai but shipped through Hong Kong before being exported to
the United States as a sale to Hong Kong. By contrast, the United States and many of China’s
other trading partners count Chinese exports that are transshipped through Hong Kong as
products from China, not Hong Kong, including goods that contain Hong Kong components or
involve final packaging in Hong Kong. The United States also counts Hong Kong as the
destination of U.S. products sent there, even those that are then reexported to China. However,
the PRC counts many of such reexported goods as U.S. exports to China. So by U.S. figures, U.S.
exports to China tend to be understated, while by Chinese figures, Chinese exports to the United
States tend to be understated. The net result is that the trade surplus with the United States at $102
billion in 2008 that China reported was less than half the U.S. deficit with China of $268 billion
reported by the United States. For 2009, China reported a trade surplus with the United States of
$182 billion while the U.S. figure was $273 billion.
Table 5. U.S. Merchandise Trade Balances with Selected Nations and Groups
(In millions of current U.S. dollars, Census basis)
Country 2005
2006
2007
2008
2009
2010
World -772,373
-827,971
-808,763
-816,199
-503,582
-634,588
Russia
-11,344
-15,128
-12,031
-17,448
-12,868
-19,717
Japan
-83,323
-89,722
-84,304
-74,120
-44,669
-59,802
China
-202,278
-234,101
-258,506
-268,040
-226,877
-273,066
NAFTA
-128,347 -136,313 -142,964 -143,063 -69,353 -94,618
Canada
-78,486
-71,782
-68,169
-78,342
-21,590
-28,284
Mexico
-49,861
-64,531
-74,796
-64,722
-47,762
-66,334
EU
27
-124,395 -119,325 -110,243 -95,807 -61,202 -79,780
United Kingdom
-12,465
-8,103
-6,876
-4,988
-1,776
-1,259
Germany
-50,567
-47,923
-44,744
-42,991
-28,192
-34,478
France -11,583
-13,528
-14,877
-15,209
-7,743
-11,541
Italy
-19,485
-20,109
-20,878
-20,674
-14,162
-14,272
Netherlands
11,606
13,617
14,434
18,597
16,143
15,965
ASIAN NICS
-16,606
-13,234
-5,509
2,184
3,526
14,041
Hong Kong
7,459
9,795
12,876
15,015
17,480
22,265
Korea, South
-16,210
-13,584
-13,161
-13,400
-10,604
-10,016

19 For details and policy discussion, see CRS Report RL33536, China-U.S. Trade Issues, by Wayne M. Morrison.
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U.S. International Trade: Trends and Forecasts

Country 2005
2006
2007
2008
2009
2010
Singapore
5,356
6,057
7,225
11,969
6,527
11,671
Taiwan

-13,211 -15,502 -12,449 -11,400 -9,877 -9,880
LATIN AMERICA
-50,549
-45,296
-28,035
-23,034
1,450
7,543
Argentina -462
797
1,369
1,714
1,679
3,607
Brazil
-9,064
-7,480
-1,472
1,846
6,026
11,439
Colombia -3,387
-2,557
-876
-1,656
-1,872
-3,603
Panama 1,835
2,281
3,304
4,508
3,991
5,690
OPEC -104,650
-121,408
-128,769
-177,699
-69,577
-105,180
Venezuela
-27,557
-28,131
-29,709
-38,814
-18,744
-22,114
Saudi Arabia
-20,387
-24,049
-25,230
-42,263
-11,261
-19,829
Nigeria -22,620
-25,630
-29,992
-33,966
-15,441
-26,476
Iraq
-7,680
-10,055
-9,835
-20,010
-7,491
-10,496
Iran
-79
-71
-28
579
216
115
Source: United States Census Bureau, Foreign Trade Division. For other countries and further detail, see U.S.
International Trade in Goods and Services, December 2009, FT-900 (10-12), released February 10, 2011.
Table 6 lists the U.S. top deficit trading partners in merchandise trade, on a Census basis, with
U.S. export and U.S. import data for additional insight. In 2000, China not only overtook Japan as
the top U.S. deficit trading partner, but its continuing growth in annual trade deficits since 2000
has been stark. In 2010 the U.S. trade deficit with China increased by 20%, with Mexico 39%,
and with Japan 34%. These countries were the top U.S. deficit trading partners. They were
followed by Germany, Canada, Ireland, and Nigeria.
Table 6. Top U.S. Merchandise Deficit Trading Partners, 2010
In millions of current U.S. dollars with percentage change from 2009 to 2010
Rank
Country
U.S. Balance % Change U.S. Exports % Change U.S. Imports % Change
0 WORLD
-634,588
26.0 1,277,504
21.0 1,912,092
22.6
1 China
-273,066
20.4
91,878
32.2 364,944
23.1
2 Mexico
-66,334
38.9
163,320
26.7 229,655
30.0
3 Japan

-59,802
33.9
60,545
18.4 120,348
25.6
4 Germany
-34,478
22.3
48,201
11.3
82,680
15.6
5 Canada
-28,284
31.0
248,194
21.3 276,478
22.2
6 Ireland
-26,626
29.0
7,272
-2.6
33,898
20.6
7 Nigeria
-26,476
71.5
4,040
9.6
30,516
59.5
8 Venezuela

-22,114
18.0
10,661
14.4
32,775
16.8
9
Saudi Arabia
-19,829
76.1
11,591
7.4
31,420
42.5
10 Russia


-19,717
53.2
5,968
11.9
25,685
41.1
11 Italy

-14,272
0.8
14,191
15.7
28,463
7.7
12
Thailand
-13,712
12.7
8,974
29.7
22,687
18.9
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U.S. International Trade: Trends and Forecasts

Rank
Country
U.S. Balance % Change U.S. Exports % Change U.S. Imports % Change
13
Algeria
-13,324
38.6
1,194
7.8
14,518
35.5
14 Malaysia


-11,923
-7.4
13,982
34.4
25,905
11.3
15 France


-11,541
49.1
27,010
2.0
38,551
12.6
16
Vietnam
-11,158
21.4
3,710
19.8
14,868
21.0
17 Angola


-10,655
34.6
1,292
-9.2
11,947
27.9
18
Iraq
-10,496
40.1
1,646
-7.1
12,142
31.1
19 India

-10,308
118.2
19,223
16.9
29,531
39.5
20
Korea, South
-10,016
-5.5
38,844
35.8
48,860
24.6
21
Taiwan
-9,880
0.0
26,027
40.8
35,907
26.6
22 Israel


-9,703
5.6
11,272
17.9
20,975
11.9
23
Indonesia
-9,534
21.7
6,943
35.9
16,477
27.4
24
Sweden
-5,865
61.8
4,706
3.2
10,571
29.2
25
Trinidad & Tobago
-4,695
47.1
1,926
- 3.2
6,621
27.8
Source: CRS with U.S. Department of Commerce. U.S. International Trade in Goods and Services, FT-900
(10-12).
Notes: Data are on a Census basis. Exports are valued f.a.s.; imports are valued Customs.
Total merchandise trade, exports plus imports, presents a clearer picture of countries’ overall
importance than any other flow. As seen in Table 7, in the past three years, Canada continued to
be the United States’ largest total merchandise trading partner. Canada was followed by China,
Mexico, Japan, Germany, the United Kingdom, Korea, and France. Brazil and the Netherlands
switched places from number 9 in 2008 to number 11 in 2009. Canada’s position as the historic
largest supplier of U.S. imports in 2006 and before changed in 2007, as China surpassed Canada.
In 2008 Canada regained the top spot in U.S. imports. In 2009, China regained first place in U.S.
imports. Canada is by far the top purchaser of U.S. exports with Mexico second. In 2007 China
passed Japan to become third. In 2009, Japan maintained the ranking of our fourth-largest export
market.
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Table 7. Top U.S. Trading Partners Ranked by Total Merchandise Trade in 2010
(In millions of current U.S. dollars)
Rank Country
Total trade
% Share U.S. Exports U.S. Imports
U.S. Balance
0
World
3,189,595
100.00
1,277,504
1,912,092
-634,588
1
Canada
524,672
16.45
248,194
276,478
-28,284
2
China
456,822
14.32
91,878
364,944
-273,066
3
Mexico
392,975
12.32
163,320
229,655
-66,334
4
Japan
180,893
5.67
60,545
120,348
-59,802
5
Germany
130,881
4.10
48,201
82,680
-34,478
6
United Kingdom
98,252
3.08
48,497
49,755
-1,259
7
Korea South
87,703
2.75
38,844
48,860
-10,016
8
France
65,561
2.06
27,010
38,551
-11,541
9
Taiwan
61,934
1.94
26,027
35,907
-9,880
10
Brazil
59,275
1.86
35,357
23,918
11,439
11
Netherlands
54,031
1.69
34,998
19,033
15,965
12
India
48,754
1.53
19,223
29,531
-10,308
13
Singapore
46,628
1.46
29,150
17,478
11,671
14
Venezuela
43,436
1.36
10,661
32,775
-22,114
15
Saudi Arabia
43,011
1.35
11,591
31,420
-19,829
16
Italy
42,655
1.34
14,191
28,463
-14,272
17
Ireland
41,170
1.29
7,272
33,898
-26,626
18
Belgium
41,141
1.29
25,551
15,590
9,962
19
Malaysia
39,887
1.25
13,982
25,905
-11,923
20
Switzerland
39,821
1.25
20,692
19,129
1,563
Source: U.S. Department of Commerce, Bureau of the Census via World Trade Atlas.
Notes: Total trade = exports + imports. Data are on a Census basis. Exports are valued f.a.s.; imports are
valued Customs.
U.S. Current Account Balances with Selected
Nations in 2009 and 2010
Table 8 lists trade balances on goods, services, income, net unilateral transfers, and current
account for selected U.S. trading partners. While trade in services, flows of income from
investments, and remittances home by foreign workers are considerably smaller than merchandise
flows, as the U.S. economy has become more globalized and service-oriented, these components
of the current account have become more important. In many cases, the bilateral current account
balances are quite different from bilateral balances on merchandise trade only. For example,
Canada’s merchandise trade deficit of $21.6 became a current account surplus of $16.1 in 2009.
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Table 8. U.S. Current Account Balances With Selected U.S. Trading Partners, 2009
(In billions of current U.S. dollars)
Merchandise
Investment
Net
Current
Trade
Services
Income
Unilateral
Account
Country
Balancea
Balanceb
Balancec
Transfersd
Balancee
All Countries
-517.0 138.4 89.0 -130.2 -419.9
Mexico
-50.7
8.2
-1.3
-13.3
-57.1
Canada
-21.6
20.9
18.8
-2.0
16.1
Asia and Pacific
-315.2
43.9
-36.0
-27.6
-334.9
China
-227.6
6.7
-40.4
-2.9
-263.7
Japan
-45.5
17.5
-21.0
-0.1
-49.0
S. Korea
-11.3
4.7
1.9
-0.9
-5.5
European Union
-63.5
41.7
22.4
-6.0
-5.4
Germany
-28.4
-8.9
-6.2
-2.5
-46.0
United Kingdom
-1.6
14.7
-6.3
2.3
9.1
Latin America
-49.4
21.3
41.8
-31.3
-17.7
Middle East
-16.9
3.8
-4.6
-11.7
-29.5
Source: U.S. Bureau of Economic Analysis, International Transactions Account Data.
a. On a Balance of Payments basis.
b. Includes travel, transportation, fees and royalties, insurance payments, other government and private
services, and investment income.
c. Income receipts on U.S. assets abroad minus income payments on foreign assets in the United States.
d. International transfers of funds, such as private gifts, pension payments, and government grants for which
there is no quid pro quo.
e. The trade balance plus the service balance plus investment income balance plus net unilateral transfers,
although equal to the current account balance, may differ as a result of rounding.
Specific financial and trade flow data for the United States with other countries in 2009, the first
full year of the global financial crisis, were mainly at a lower level than previous years. For
comparison, we will present 2009 data with data for 2008 in parentheses. Since Japan has
invested considerable amounts in securities, equities, and in factories in the United States, the
United States ran a deficit of $21 billion ($29.9 billion in 2008) in investment income with that
country in 2009. This more than offset the surplus of $17.5 billion ($15.5 billion) in trade in
services with Japan. As a result, the current account deficit with Japan of $49 billion ($90.5
billion in 2008) in 2009 exceeded the bilateral merchandise trade deficit of $45.5 billion ($75.1
billion). Likewise with China; the U.S. deficit on investment income of $40.4 billion ($43.2
billion in 2008) far overshadowed the U.S. surplus of $6.7 billion ($6.0 billion) in services.
In 2009, a different situation existed with the European Union and Canada. The United States
earned a $22.4 billion ($49.7 billion in 2008) surplus in investment income with the EU in 2009,
and the U.S. surplus in services with the EU was $41.7 billion ($44.5 billion). These two flows
offset a merchandise deficit of $63.5 billion ($98.7 billion in 2008) to produce a U.S. current
account deficit of -$5.4 billion ($11.6 billion), lower than the 2006 current account deficit of
$86.9 billion. From Canada the United States received $18.8 billion ($24.4 billion in 2008) in
investment income plus a surplus in services trade of $20.9 billion ($21.3 billion). Hence, the
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current account surplus with Canada at $16.1 billion (deficit of $37.2 billion in 2008) was lower
than the deficit of $21.6 billion ($81.0 billion in 2008) in merchandise trade.
The rising deficit with many countries in investment income reflects the accumulating debt of the
United States relative to various countries and country groups of the world. Inflows of capital to
compensate for the U.S. trade deficit and a low U.S. savings rate help to maintain the value of the
dollar, but interest paid and other income that accrues to that capital is often repatriated to the
home countries. That means more capital must be invested in the United States or the United
States must export more to compensate for the outflows of investment income. In 2009, the
overall U.S. balance on investment income registered a surplus of $89 billion, lower than the
2008 balance on investment income of $118.2 billion. Imbalances in investment income with
certain countries have been growing and could become a problem in the future.
Table 9 provides data for 2010 that is parallel to that in Table 8. In 2010, nations emerged from
the global financial crisis.
Table 9. U.S. Current Account Balance Flows with Selected
U.S. Trade Partners, 2010
In billions of current U.S. dollars
Goods
Investment
Current
Trade
Services
Income
Net Unilateral
Account
Country
Balance
Balance
Balance
Transfers
Balance
All Countries
-647.1 151.4 163.0 -137.5 -470.2
Canada -30.9
23.8
28.2
-3.1
18.1
Mexico -69.6
9.1
2.3
-13.0
-71.1
Brazil 11.0
10.6
12.2
-1.0
32.8
Asia and Pacific
-371.7 57.5 -29.2 -33.3 -376.7
China -273.1
10.4
-36.7
-3.0
-302.4
Japan -61.3
20.0
-32.8
-1.2
-75.2
South Korea
-9.7
5.1
0.2
-1.2
-5.7
European Union
-80.9 37.0 37.7
-3.6 -9.8
Euro Area
-66.8 22.9 48.1
-2.3 1.8
Germany -34.6
-5.5
-5.8
0.5
-45.5
United Kingdom
-2.3
10.6
-8.8
-0.3
-0.8
Latin America
-63.0 19.1 66.8 -33.9 -10.9
Middle East
-27.8 3.0 2.2 -10.9 -33.5
OPEC
-97.1 11.1 3.8
-7.5 -89.7
Source: U.S. Bureau of Economic Analysis, International Transactions data.
Notes: Data definitions are identical to previous table.
In 2010, the U.S. surplus in services at $151 billion continued to grow. The surplus in investment
income at $163 billion was even larger despite net outflows of $37 billion to China and $33
billion to Japan. The deficit of $138 billion in unilateral transfers reflects the many workers in the
United States who remit funds back to their home countries. Note that the U.S. surplus in services
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and investment income with Canada turns a $31 billion deficit on goods into an $18 billion
surplus on current account. For China and Japan, however, the large U.S. deficit in investment
income caused the U.S. deficits on current account to exceed the deficits on goods.
Advanced Technology, Transportation, and Energy
High Technology Trade
Table 10 shows U.S. trade in advanced technology products. This includes about 500 commodity
classification codes representing products whose technology is from a recognized high
technology field (e.g., biotechnology) or that represent the leading technology in a field. The
United States long ran a surplus in these products, but that surplus dropped sharply in 2000 and
turned into a deficit in 2002. The U.S. trade balance in high technology products was last in
surplus in 2001.
From 2002 to 2005, the United States ran a trade deficit in high technology products which grew
roughly $10 billion dollars per year. In 2006 this deficit dropped to $38.1 billion, but in 2007
resumed its former growth path, jumping to $61.9 billion. In 2008, our advanced technology
deficit stabilized at $61.1 billion, in 2009 decreased to $56.0 billion, and in 2010 jumped to $81.8
billion. This deficit does not necessarily imply that the United States is losing the high technology
race, since many of the high technology imports are from U.S. companies (particularly electronics
manufacturers) who assemble the products overseas. However, this growing deficit may warrant
closer policy scrutiny.20
Figure 8 illustrates both our current deficit in high technology products and our continuing strong
exports in these diverse areas.

20 For information on the activities of multinational corporations in international trade, see CRS Report R40167,
Globalized Supply Chains and U.S. Policy, by Dick K. Nanto.
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Figure 8. U.S. Trade in High Technology Products
Values in current U.S. Billion dollars
400.0
350.0
300.0
250.0
. $
200.0
S
150.0
n U.
100.0
io
ill
50.0
B
0.0
-50.0
-100.0
-150.0
9
3
7
9
3
7
198
1991
199
1995
199
199
2001
200
2005
200
2009
US Exports
US Imports
US Balance

Source: U.S. Census Bureau/Foreign Trade. U.S. Trade in goods by Country, at http://www.census.gov/goreign-
trade/balance/.
Notes: Balance of Payments basis data.
Table 10. U.S. Trade in Advanced Technology Products
(In billions of U.S. dollars)
Year
U.S. Exports U.S. Imports Trade Balance
1990 93.4 59.3 34.1
1995 138.4 124.8 13.6
1996 154.9 130.4 24.5
1997 179.5 147.3 32.2
1998 186.4 156.8 29.6
1999 200.3 181.2 19.1
2000 227.4 222.1 5.3
2001 200.1 195.3 4.8
2002 178.6 195.2 -16.6
2003 180.2 207.0 -26.8
2004 201.4 238.3 -36.9
2005 216.1 259.7 -43.6
2006 252.7 290.8 -38.1
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Year
U.S. Exports U.S. Imports Trade Balance
2007 264.9 326.8 -61.9
2008 270.1 331.2 -61.1
2009 244.7 300.9 -56.2
2010 272.7 354.5 -81.8
Source: U.S. Bureau of the Census. U.S. International Trade in Goods and Services. FT-900 (10-12), February, 2011.
Notes: Includes about 500 of some 22,000 commodity classification codes that meet the following criteria: (1)
contains products whose technology is from a recognized high technology field (e.g., biotechnology), (2)
represent leading edge technology in that field, and (3) constitute a significant part of all items covered in the
selected classification code. Data are on a BoP basis.
Motor Vehicle Trade
Table 11 and Figure 9 provide data on trade in passenger cars, trucks, and parts with major
automobile producing nations for 2010. This does not include foreign cars assembled in the
United States, or American cars assembled abroad. The United States incurs the largest deficits in
this trade with Canada, Germany, Japan, South Korea, and Mexico. In 2009 the United States had
a surplus in automotive trade with Canada. The U.S. trade balance in motor vehicles improved
from a -$145 billion deficit in 2006 to a -$120.9 billion deficit in 2007, a -$106.6 billion deficit in
2008 to a -$73.4 billion deficit in 2009 and -$110.3 billion in 2010.21 Figure 9 shows that while
the United States runs deficits in both cars and automotive parts, it runs a small surplus in trucks,
and exports profitably in all three segments.
Table 11. U.S. Trade in Motor Vehicles (Passenger Cars, Trucks, and Buses) and Parts
by Selected Countries, 2010
(In millions of U.S. dollars)
Country Total Cars Trucks Parts
U.S. Exports
TOTAL 116,239
38,334
19,353
58,552
Canada 50,441
11,234
12,789
26,418
Germany 5,748
4,057
116
1,575
Japan 1,725
376
40
1,309
Korea 920
359
49
512
Mexico 20,987
2,867
697
17,423
U.S. Imports
TOTAL 226,516
114,967
16,005
95,544
Canada 52,194
35,766
1,266
15,162
Germany 24,022
17,414
112
6,496

21 For information on the automobile industry, see CRS Report RL32883, U.S. Automotive Industry: Recent History
and Issues, by Stephen Cooney and Brent D. Yacobucci.
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U.S. International Trade: Trends and Forecasts

Country Total Cars Trucks Parts
Japan 45,887
31,931
492
13,464
Korea 11,731
6,550
2
5,178
Mexico 58,033
14,444
13,550
30,039
U.S. Balance
TOTAL -110,277
-76,633
3,348
-36,992
Canada -1,753
-24,532
11,523
11,256
Germany -18,274
-13,357 4
-4,921
Japan -44,162
-31,555
-452
-12,155
Korea -10,811
-6,191
47
-4,666
Mexico -37,046
-11,577
-12,853
-12,616
Source: U.S. Bureau of the Census, U.S. International Trade in Goods and Services, FT-900.
Note: Census basis data.
Figure 9. 2010 U.S. Automotive Trade by Major Segment
(In millions of U.S. dollars)

Source: U.S. Bureau of the Census. U.S. International Trade in goods and Services. FT-900 (09-12).
Energy Trade
Figure 10 illustrates the size and scope of the United States energy balance. The blue line graphs
the U.S. merchandise trade deficit with the world in all commodities. The green line graphs the
U.S. energy deficit. Subtract the green line from the blue line and you derive the U.S. no-energy
trade deficit, the orange curve. In 2010, instead of a deficit of $634.6 billion, without energy’s
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$272.7 billion deficit, the U.S. trade deficit would equal $361.9 billion, 55% of its current size.
Moving in that direction is the inspiration for the President’s energy initiatives. President Obama
recently said:
But over the long term, the only way we can avoid being held hostage to the ups and downs
of oil prices is if we reduce our dependence on oil. That means investing in clean, alternative
sources of energy, like advanced biofuels and natural gas. And that means making cars and
trucks and buses that use less oil.
Other countries know this, and they're going all in to invest in clean energy technologies and
clean energy jobs. I don't want other countries to win the competition for these technologies
and these jobs. I want America to win that competition. I want America to win the future.22
Figure 10. U.S. Trade Balance, Energy Balance, and No-Energy Balance

Source: U.S. National Bureau of Economic Research, U.S. Bureau of the Census, CRS.
Notes: Census basis data. Energy is defined as al forms of energy, Harmonized System classification HS27.
The President and many others frequently discuss American dependence on foreign oil. How
dependent are we on foreign energy and what are the sources of U.S. energy imports?
Table 12 shows exports, imports, and balance of primary forms of energy by major country
source. The United States is the world’s top importer, and at $354 billion our top import is energy.

22 Administration of Barack Obama, 2011. The President’s Weekly Address, May 7, 2011. Available through GPO
FDSys Compilation of Presidential Documents at http://www.gpo.gov/fdsys/pkg/DCPD-201100334/pdf/DCPD-
201100334.pdf.
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Energy is also our sixth-ranked export commodity. The $272.7 billion U.S. deficit in energy
accounted for 43% of the overall U.S. merchandise trade deficit in 2010.
Table 12. U.S. Energy Trade with the World, 2008-2010

Total in Millions of U.S. Dollars
% Share of Total
% Change
Description
2008 2009 2010 2008 2009 2010
2010/2009
Total Energy Exports
76,940
55,059
80,965
100.0
100.0
100.0
47.1
Total
Energy
Imports
491,960 271,798 353,628 100.0 100.0
100.0 30.1
Total Energy Balance
-415,020
-216,739
-272,664



25.8
Crude
Oil
Exports 2,296 1,768 1,871 3.0 3.2 2.3 5.9
Crude
Oil
Imports 353,537 194,603 260,128 71.9 71.6 73.6 33.7
Crude
Oil
Balance -351,241 -192,836 -258,257



33.9
Refined
Exports 51,973 36,457 53,708 67.6 66.,2 66.3 47.3
Refined
Imports 87,116 52,593 67,280 17.7 19.4 19.0 27.9
Refined
Balance -35,143 -16,137 -13,571



-15.9

Nat. Gas Exports
6,500
5,006
7,299
8.5
9.1
9.0
45.8
Nat.
Gas
Imports 40,452 18,874 19,815 8.2 6.9 5.6 5.0
Nat. Gas Balance
-33,952
-13,868
-12,517



-9.7
Electricity
Exports
1,264 562 648 1.6
1.0
0.8
15.4
Electricity
Imports 3,644 2,075 2,071 0.7 0.8 0.6 -0.2
Electricity Balance
-2,380
-1,513
-1,423



-5.9
Sources: U.S. Census Bureau via World Trade Atlas, using Harmonized Schedule (HS) 27 for total energy, 2709
for crude oil, 2710 for refined product, 2711 for natural gas, and 2716 for electricity.
Note: Census basis data.
Crude oil is the major U.S. energy import product. It accounted for 73% of U.S. energy imports in
2010, and, after subtracting exports of $1.8 billion, generated a sectoral trade deficit of $258.3
billion.Crude oil import values dropped from $354 billion in 2008 to $195 billion in 2009, then
rebounded to $260 billion in 2010. While values changed significantly during the global financial
crisis, percentages of total U.S. energy trade remained in the low 70s.
Table 13 shows the source countries for U.S. crude oil imports. Although Canada is the major
U.S. supplier, roughly half came from the Organization of the Petroleum Exporting Countries
(OPEC) with Venezuela, Saudi Arabia, and Nigeria the predominant suppliers. Imports from Iraq
are recovering with $12 billion worth in 2010.23
The major U.S. energy export product is refined petroleum products, such as gasoline and
aviation fuel. Refined petroleum products rank second to civilian aircraft, engines, and parts in
top U.S. export products. Major markets for refined products are Mexico, Netherlands, Canada,
Singapore, and Chile.

23 For policy discussion, see CRS Report RS22204, U.S. Trade Deficit and the Impact of Changing Oil Prices, by
James K. Jackson.
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Table 13. U.S. Imports of Crude Oil from Top 20 Countries, 2008-2010
Value in millions of U.S. dollars; Quantity in millions of barrels
2008
2009
2010
Source Country
USD Quantity USD Quantity USD Quantity
World
353,537 3,716
194,603 3,428
260,128 3,482
OPEC
205,687 2,117 99,701 1,740
135,950 1,785
Canada
62,951 686
37,067 681
49,554 696
Saudi
Arabia
53,223 546
21,002 373
29,981 395
Mexico
37,154 419
22,206 386
29,423 409
Venezuela 43,734 475
24,619 445
29,090 407
Nigeria
35,945 345
18,288 282
29,069 362
Iraq
21,710 224
9,128 165
12,126 160
Angola
18,548 185
9,017 163
11,514 147
Algeria
15,118 153
7,878 133
10,856 137
Colombia 5,897 63
5,153 90
8,833 120
Russia
4,957 47
4,884 82
7,480 96
Brazil
7,851
86 5,801 106 7,259
95
Ecuador 7,102 80
3,438 66
5,578 75
Kuwait
6,631 74
3,654 65
5,152 69
United
Kingdom
2,609 27
2,406 40
3,402 43
Congo
4,930 50
2,971 48
3,127 40
Gabon
2,156 23
1,139 21
2,124 27
Azerbaijan 4,275 41
1,955 31
1,983 25
Equatorial
Guinea
3,084 32
2,377 41
1,960 26
Chad
3,178 36
1,839 34
1,775 25
Libya
2,865 27
1,408 24
1,642 21
Source: CRS with U.S. Dept. of Commerce, Bureau of the Census via World Trade Atlas.
Notes: Census basis data. Countries in bold are members of OPEC.
Some Common Perceptions
This section of the report addresses a few common perceptions about trade that can be validated
by data.
Is Trade with China Merely Replacing That with Southeast Asia?
Some observers claim that the rising U.S. imports from China are merely displacing those from
other East Asian nations. Labor intensive industries, such as apparel, shoes, and consumer
electronics, that produce for export to the United States and other industrialized nations are
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simply moving to China from Southeast Asian nations, including South Korea, and Taiwan. The
overall level of imports from Asia is not changing. Its composition is just shifting toward China.
For specific industries, the shift in imports from traditional Asian exporting nations to China is
clear. In woven apparel (HS 62), for example, in 1990, Hong Kong, South Korea, and Taiwan
accounted for 48% of U.S. imports as compared to China with a 14.7% share. By 2006, China
accounted for 35.3% of such imports, as compared to 4.9% for Hong Kong, South Korea, and
Taiwan combined. By 2010, China’s contribution to U.S. imports of woven apparel increased to
43.1%. Hong Kong, South Korea, and Taiwan collectively had fallen to 0.6% of such imports.24
The decline in woven apparel imports from Hong Kong, South Korea, and Taiwan also may
reflect their shift to production of high-technology goods. As these Southeast Asian countries
continue to industrialize, woven apparel imports from less-developed countries, such as
Indonesia, Bangladesh, and Vietnam, likely will continue to increase. A new trend is the rise of
producers of woven apparel located in the Americas.
Woven apparel trade, is not necessarily a precise predictor of general trade sources and values. In
terms of overall imports, U.S. imports from Hong Kong, Taiwan, and South Korea rose from
$50.6 billion (10.2% of total U.S. imports) in 1990 to $89 billion (5% of total) in 2010, while
imports from China rose from $15.2 billion (3% of total) in 1990 to $365 billion (19% of total) in
2010.25 Clearly, the share of U.S. imports from Hong Kong, Taiwan, and South Korea has been
falling, while the share of imports from China is rising. The value of U.S. imports from both,
however, continues to rise, while the value of those from China is rising faster. Table 14 shows
that by 2010, Hong Kong, Taiwan, and South Korea have fallen well below U.S. top 10 import
source countries for woven apparel. China has expanded its percentage share of the market for
U.S. woven apparel from 2007’s 35.7% share to 2008’s 37.3% share to a 43.1% share in 2010
despite the global financial crisis and U.S. recession.

24 Calculations based on data from World Trade Atlas, using HS 62 for woven apparel.
25 The numbers are comparable for all Asian and world countries.
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Table 14. U.S. Imports of Woven Apparel
(Millions of U.S. dollars and percentages)


U.S. Imports
% Share
% Change
Rank
Country
2008 2009 2010 2008 2009 2010
2010/2009
0
World 35,719
30,923
34,205
100.0
100.0
100.0
10.6
1
China 13,316
12,904
14,733
37.3
41.7
43.1
14.2
2
Bangladesh
2,413
2,496
2,834
6.8
8.1
8.3
13.6
3
Vietnam
2,341
2,117
2,438
6.6
6.9
7.1
15.2
4
Mexico
2,533
2,208
2,326
7.1
7.1
6.8
5.3
5
Indonesia
2,021
1,732
1,929
5.7
5.6
5.6
11.3
6
India
1,790
1,649
1,741
5.0
5.3
5.1
5.6
7
Italy
1,140
741
746
3.2
2.4
2.2
0.8
8
Cambodia
786
585
692
2.2
1.9
2.0
18.3
9
Sri Lanka
816
691
687
2.3
2.2
2.0
-0.6
10
Thailand
706
492
495
2.0
1.6
1.5
0.7
11
Egypt
430
429
481
1.2
1.4
1.4
12.0
12
Philippines
627
443
449
1.8
1.4
1.3
1.4
13
Honduras
535
420
437
1.5
1.4
1.3
4.2
14
Pakistan
460
385
429
1.3
1.3
1.3
11.6
15
Canada
422
294
304
1.2
1.0
0.9
3.5
16
Nicaragua
336
245
296
0.9
0.8
0.9
20.8
Dominican
17
Republic
357
268
293
1.0
0.9
0.9
9.6
18
Guatemala
362
206
273
1.0
0.7
0.8
32.6
19
Jordan
287
223
236
0.8
0.7
0.7
5.9
Source: U.S. Census Bureau via World Trade Atlas.
Notes: Census basis data ranked by latest year (2010) source country.
The large U.S. trade deficit with China, moreover, is not just a transfer of the deficit from other
Asian nations to China. The U.S. trade deficit with Hong Kong, Taiwan, and South Korea has
gone from $17.9 billion (17.5% of the total U.S. deficit) in 1990 to $11.8 billion (1.5% of the
total) in 2007. U.S. trade with Hong Kong actually went from a deficit in 1992 to a surplus in
1993, and remained in surplus through 2009. The U.S. trade deficit with China, meanwhile, went
from $10.4 billion (10.2% of the total U.S. trade deficit) in 1990 to $226.8 billion (45.3% of the
total) in 2009. What actually is happening is quite complex. While the U.S. trade deficit with the
world is declining, it continues to rise with China, Mexico and oil exporting countries. Table 15
illustrates this complexity. Negative percentage change numbers, indicate a shrinking U.S.
merchandise trade deficit with that country or group. Positive percentage changes indicate
growing deficits.
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Table 15. Changes in U.S. Merchandise Trade Balances With
Selected Countries and Groups, 2007, 2008, and 2009

U.S. Merchandise Trade Balance
% Change
Country 2007
2008
2009a 2008/2007 2009/2008
World
Total -$808,763 -$816,199 -$500,944
0.9
-38.6
China -$258,506
-$268,040
-$226,826 3.7 -15.4
OPEC -$128,769
-$177,699
-$69,681 38.0 -60.8
EU 27
-$110,243
-$95,807
-$60,543
-13.1
-36.8
Mexico -$74,796
-$64,722
-$47,539
-13.5 -26.6
Japan -$84,304
-$74,120
-$44,769
-12.1
-39.6
Germany -$44,744
-$42,991
-$27,954 -3.9 -35.0
Canada -$68,169
-$78,342
-$20,183
14.9 -74.2
Venezuela -$29,709
-$38,814
-$18,735 30.7 -51.7
Nigeria -$29,992
-$33,966
-$15,470
13.3 -54.5
Russia -$12,031
-$17,448
-$12,838
45.0 -26.4
Thailand -$14,418
-$14,472
-$12,164 0.4 -15.9
Saudi Arabia
-$25,230
-$42,263
-$11,242
67.5
-73.4
Korea, So.
-$13,161
-$13,400
-$10,595
1.8
-20.9
Taiwan -$12,449
-$11,400
-$9,942 -8.4 -12.8
Vietnam -$8,730
-$10,112
-$9,182
15.8 -9.2
Israel -$7,907
-$7,849
-$9,177
-0.7
16.9
ASIAN NICS
-$5,509
$2,184
$3,634
139.6
66.4
Panama $3,304
$4,508
$4,054
36.5
-10.1
Brazil -$1,472
$1,846
$6,101
225.4
230.6
Singapore $7,225
$11,969
$6,620 65.7 -44.7
UAE $9,449
$13,131
$10,610
39.0
-19.2
Australia $10,563
$11,630
$11,583 10.1 -0.4
Netherland $14,434
$18,597 $16,244 28.8
-12.7
Hong Kong
$12,876
$15,015
$17,552
16.6
16.9
Source: U.S. Department of Commerce, Bureau of the Census via World Trade Atlas.
Notes: Merchandise trade data on a Census Basis. The U.S. balance with Singapore, Hong Kong and Asian 4
NICs are positive. Members of OPEC are listed in Table 11, above. Members of Asian 4 Newly Industrializing
Countries (NICs) are Hong Kong, Singapore, South Korea, and Taiwan.
a. Rankings are based on 2009 data.
Trade Balances with Free Trade Agreement Nations
There is a commonly held perception that free trade agreements lead to larger U.S. deficits in
trade. The perception seems to be generated mostly by U.S. trade with its immediate neighbors,
Canada and Mexico. Research indicates that the United States runs both surpluses and deficits
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with FTA partners. As shown in Figure 11, in both 2009 and 2010, the United States ran trade
surpluses with Australia, Singapore, Chile, the Dominican Republic, Morocco, and seven other
FTA countries, shown on the chart below. The United States ran deficits with Mexico, Canada,
Israel, Costa Rica, and Nicaragua.
Figure 11. U.S. Balance of Merchandise Trade with FTA Partners in 2009 and 2010

FTA Trading Partner
11.6
Australia
13.2
6.5
Singapore
11.7
3.4
Chile
3.8
1.9
Dominican Republic
2.9
1.2
Morocco
1.3
0.7
Guatemala
1.2
0.7
Peru
1.7
0.3
Jordan
0.2
0.2
Bahrain
0.8
0.2
El Salvador
0.2
0.2
Oman
0.3
0
Honduras
0.7
-0.9
Nicaragua
-1
-0.9
Costa Rica
-3.5
-9.2
Israel
-9.7
-21.6
2009
Canada
-28.3
-47.8
2010
Mexico
-66.3
-80
-60
-40
-20
0
20
$Billion

Source: Congressional Research Service., U.S. Census Bureau.
Notes: The United States has signed free trade agreements with Columbia, Panama, and South Korea that have
not been approved by Congress and implemented.
International Trade Statistics Web Resources
Listed below are a list of resources available online for international trade statistics.
The single most authoritative, comprehensive, and frequently-published trade data statistical
source is the monthly “FT900”. Its actual title is U.S. International Trade in Goods and Services.
The FT-900 is issued monthly by the U.S. Census Bureau and the U.S. Bureau of Economic
Analysis. It provides information on the U.S. trade in goods and services (balance, exports, and
imports) in specific commodities and end-use categories and with selected countries. The report
also provides information on trade in advanced technology, petroleum, and motor vehicle
products. The report is available from the U.S. Bureau of Economic Analysis at
http://www.bea.gov/newsreleases/rels.htm. Under “International” click on latest news release.
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Information on trade in specific commodities, with particular regions, or for different time
periods also can be obtained from the U.S. International Trade Commission at
http://dataweb.usitc.gov/ (registration is required).
Historical and current U.S. exchange rate data are available from the Federal Reserve Bank of St.
Louis at http://research.stlouisfed.org/fred2/.
Information on foreign country holdings of U.S. Treasury securities are available at
http://www.treasury.gov/tic/.


Author Contact Information

Dick K. Nanto
J. Michael Donnelly
Specialist in Industry and Trade
Information Research Specialist
dnanto@crs.loc.gov, 7-7754
mdonnelly@crs.loc.gov, 7-8722




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