The U.S. has been humbled. The economy is in the doldrums, unemployment is high and Americans have gotten so used to trade deficits of hundreds of billions of dollars a year that few have noticed imports have fallen significantly from their peak in 2008. But rest assured, others have noticed that trend -- and they're worried about it.
Total imports fell from $2.538 trillion in 2008 to $1.947 trillion in 2009 -- a decline of almost $600 billion. This means the nations that export goods to the U.S. received $600 billion less from the U.S., and that's a lot of sales to lose.
Unsurprisingly, that decline in sales to the U.S. is one reason for a slow-growth global economy, as many of the top exporting countries struggle with tepid demand. Let's take a deeper look at U.S. imports to see who's feeling the bite.
It's Not Just Oil
Oil imports totaled $234 billion in 2008, and $215 billion in 2009 -- roughly 10% of all the goods and services the U.S. imported. While oil is the lifeblood of all advanced economies, including the U.S., its share of imports when measured in dollars is rather modest.
No, the big loser is manufactured products. Goods are the largest category of U.S. imports, totaling $2.139 trillion in 2008 but just $1.575 trillion in 2009 -- a whopping $564 billion decline. And while many focus on foreign trade with China, America's biggest trading partner is Canada.
In 2008, the U.S. imported $335.6 billion from Canada and exported $261.4 billion to our northern neighbor, for total trade of $596.9 billion. That makes Canada our No. 1 trading partner, with 17.6% of all trade -- more than our total trade of $409.2 billion with China ($337.8 billion in imports and $70 billion in exports). Other major U.S. trading partners include Mexico ($367.5 billion in total trade) and Japan ($205.8 billion in total trade). All are feeling the pinch.
Here are the 2008 imports by nation:
Canada -- $335.6 billion
China -- $337.8 billion
Mexico -- $215.9 billion
Japan -- $139.2 billion
Germany -- $97.6 billion
Canada -- $224.9 billion
China -- $296.4 billion
Mexico -- $176.5 billion
Japan -- $95.9 billion
Germany -- $71.3 billion
More Fun Facts
Taking a closer look at trade with China, here are the figures for exports, imports and the trade deficit for 2008 and 2009.
In 2008: $69.7 billion in exports to China, and $337 billion in imports, for a $268 billion U.S. trade deficit.
In 2009: $69.5 billion in exports to China $296 billion in imports for a $226 billion U.S. trade deficit.
China's surplus with the U.S. declined by $42 billion in 2009.
While both exports and imports with China are on the rise in 2010 -- imports from China rose $18 billion, while exports climbed $10 billion -- imports are still considerably lower than in 2008.
Clearly, all of our trading partners suffered major declines in their exports to the U.S. But what effect has this massive reduction in exports to the U.S. had?
Time to Adapt
The Chinese government fought the global slowdown by ramping up a massive domestic stimulus package that counteracted not just the drop in China's exports but also weak domestic consumer demand. Whether the Chinese economy can continue expanding without the government stimulus and export growth remains to be seen.
Germany, which is heavily dependent on exports to other EU nations as well as to China and the U.S., has admitted it needs to boost domestic demand to compensate for declining exports, even as it resists calls to boost its own imports.
Japan has entered a slow-growth slump as exports weaken, with no relief in sight.
Canada posted a lower trade surplus than expected in April as the soaring Canadian dollar crimped the value of exports and goods shipped to Europe fell by a quarter, but domestic demand remained strong as Canada's consumer continues to underpin the country's economy. Economists expect net exports to continue to lag as domestic demand for goods rises at a faster pace.
Mexico's economy may expand 6% this year as domestic demand increases, says Luis de la Calle, a leading Mexican economist, even though Mexico's domestic demand has lagged as exports power the recovery from last year's contraction, the worst since the 1930s. Sales figures fell slightly in early 2010, pointing to continued weakness in domestic demand.
No Coupon Specials for Global Trade
With the exception of Canada, the low-growth prospects for major exporting nations are understandable: The more dependent a nation is on its exports, the weaker its growth will be as the U.S. trims imports by hundreds of billions of dollars annually. The data suggest most of the world's exporting nations still depend on the U.S. for a significant share of their economic growth.
In a retailing, merchants often try to entice reticent customers during a downturn by offering special promotions, sales and money-saving coupons. Too bad countries can't do the same.
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