The United States has long been facing trade deficits with its major trading partners. This means that the US imports far more goods than it exports to these countries. According to the US Census Bureau, the United States has the largest trade deficit with China, which is equal to about $295 billion. This is followed by Mexico at $172 billion and Vietnam at $124 billion. The combined U.S. trade deficit with its top 10 largest deficit countries totals approximately $1 trillion.
To address this growing deficit, the U.S. has introduced tariffs on key trading partners. Trump has already put an additional 10% tariff on Chinese imports after assuming his 2nd term as a US president. Additionally, he also put 25% tariffs on Mexico and Canada, which are temporarily halted. The US has also threatened the imposition of reciprocal tariffs on its major Asian trading partners that apply higher tariffs on U.S. imports than the U.S. does on their products.
U.S. Trade Deficit with its Major Trading Partners
The following table shows the U.S. trade deficit with its major trading partners.
| Rank | Country | U.S. Exports (Billion $) | U.S. Imports (Billion $) | Trade Deficit (Billion $) |
|---|---|---|---|---|
| 1 | 🇨🇳 China | 143.55 | 438.95 | -295.4 |
| 2 | 🇲🇽 Mexico | 334.04 | 505.85 | -171.81 |
| 3 | 🇻🇳 Vietnam | 13.1 | 136.56 | -123.46 |
| 4 | 🇮🇪 Ireland | 16.54 | 103.29 | -86.75 |
| 5 | 🇩🇪 Germany | 75.61 | 160.44 | -84.82 |
| 6 | 🇹🇼 Taiwan | 42.34 | 116.26 | -73.93 |
| 7 | 🇯🇵 Japan | 79.74 | 148.21 | -68.47 |
| 8 | 🇰🇷 South Korea | 65.54 | 131.55 | -66.01 |
| 9 | 🇨🇦 Canada | 349.36 | 412.7 | -63.34 |
| 10 | 🇮🇳 India | 41.75 | 87.42 | -45.66 |
The data is sourced from the U.S. Census Bureau.
1. 🇨🇳 China
The United States has the largest trade deficit with China among all its trading partners. America’s trade deficit with China has reached approximately $295 billion in 2024. Additionally, over the past five years (2020–2024), the total U.S. trade deficit with China has amounted to approximately $1.6 trillion. This growing US deficit with China is a key factor behind the U.S.-China trade war.
Trump has already put an additional 10% tariff on Chinese imports in the early days of his second term as president. In response, China threatened to increase tariffs on U.S. goods and raised the issue at the World Trade Organization.
Back in 2018, the US imposed heavy tariffs on Chinese imports, which resulted in a trade war between the two largest economies. China retaliated with tariffs on American products, including agricultural goods. This prolonged US-China trade war has disrupted global supply chains and increased costs for both businesses and consumers.
2. 🇲🇽 Mexico
In 2024, the U.S. had the second-largest trade deficit with Mexico, which reached approximately $172 billion. Unlike China, President Trump imposed a 25% tariff on Mexican imports, though this tariff has been temporarily suspended.
According to the Economic Policy Institute, the United States had a trade surplus with Mexico in 1993 before the North American Free Trade Agreement (NAFTA) took effect. However, since then, U.S. imports from Mexico have increased at a much faster pace than exports, resulting in major trade deficits.
Additionally, given the interconnected nature of North American trade under the USMCA (United States-Mexico-Canada Agreement), imposing high tariffs on Mexico could increase production costs for American manufacturers.
U.S. Trade Deficit with Major Asian Economies in 2024
3. 🇻🇳 Vietnam
In 2023, the U.S. trade deficit with Vietnam was $104.58 billion. By 2024, it increased to $123.46 billion, representing a roughly 18% rise in one year. Vietnam has rapidly become a major supplier of electronics, textiles, and machinery to the U.S. Over the past decade, many companies have shifted production from China to Vietnam to diversify supply chains and reduce exposure to U.S. tariffs on Chinese goods.
4. 🇮🇪 Ireland
In 2024, the United States recorded a fourth-largest trade deficit of approximately $87 billion in goods with Ireland. This high trade deficit was due to the large U.S. imports of pharmaceuticals and technology products from Ireland. Many U.S. tech companies, like Apple and Google, have headquarters in Ireland to benefit from its low corporate tax rates.
5. 🇩🇪 Germany
After China, Mexico, Vietnam, and Ireland, the US has the fifth-largest trade deficit with Germany at approximately $85 billion in 2024. Germany is a major exporter of automobiles, machinery, and industrial equipment to the United States.
Other Major U.S. Trade Deficit Countries
Beyond the top five, the U.S. also runs significant deficits with Taiwan, Japan, South Korea, Canada, and India. These deficits result from various factors, including high-tech imports from Taiwan and South Korea, automobiles from Japan, energy imports from Canada, and pharmaceuticals from India.
Tariffs Impacts
Imposing tariffs on foreign products is a common way to protect domestic industries. However, it often results in higher costs for both consumers and businesses. Tariffs make imported goods more expensive, which raises the prices of goods and services for consumers. Additionally, many U.S. manufacturers depend on foreign raw materials, so tariffs on these imports increase their production costs.
The one major drawback of the tariff is that it leads to disruption in international trade, and retaliatory tariffs from other nations result in trade wars. Tariffs may reduce trade deficits in the short term; however, they often create trade disruptions in the long run.
Conclusion
The total U.S. trade deficit with its top 10 trading partners exceeds $1 trillion in 2024. The U.S. faced the highest trade deficit in goods with China at approximately $295 billion, followed by Mexico and Vietnam. These growing trade imbalances have already led to trade tensions between the U.S. and its major partners. In response to growing trade tensions, President Trump imposed an additional 10% tariff on Chinese imports and has threatened to implement a 25% tariff on Mexico and Canada.
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