Which country does the United States import the most goods from?
China is the US’ largest trading partner. How has this relationship shifted over the years?
In the 1990s, when trade relations between the United States and China were normalized, China quickly emerged as the United States’ largest trading partner. Due to lower labor costs, production, and manufacturing were outsourced to markets like China. Even though outsourcing created issues for local economies that saw jobs shipped overseas, on the whole, consumption grew as lower prices were offered across US retailers.
The US’ trade deficit with China widens
According to the most recent data from the US Census Bureau, in 2017, China accounted for almost 17 percent of trade in the United States. Of all the goods imported into the United States, 41 percent came from China, almost double the next closest trading partner, Canada, with 24 percent. More recent figures from the US Trade Representative reveal that in 2022, the United States imported goods worth more than half a trillion dollars ($536.3 billion), representing a 6.3 percent increase over the previous year.
In contrast, US exports to China were only $154 billion, meaning the trade deficit between the US and China was $382.3 billion. The deficit grew by 8.3 percent between 2021 and 2022. However, in 2023, the deficit shrank to $279.4 —the lowest level in more than a decade.
After the Chinese Revolution that led to the ousting of the US-friendly regime in the country, economic relations between the newly founded People’s Republic of China and Washington DC soured. High tariffs were imposed on Chinese goods, and it was not until diplomatic relations were restored in the early 1970s that economic relations improved. By 1984, the US was China’s third largest trading partner, and China was the US’ 14th largest market for exported goods. Over the years, this imbalance would switch, with the US importing far more goods from China than China from the US.
The US-China trade relationship took off after China was admitted to the World Trade Organization in 2001, a deal that then-President Bill Clinton negotiated before leaving office. The market for Chinese goods exploded in the US as trade relations normalized because US companies could produce goods at a far lower cost and increase their profit margins substantially without increasing prices on domestic consumers.