U.S. Imports: Statistics and Issues

Love Imported Goods, But Hate Losing American Jobs?

chocolate-croissants.jpg
Imported French chocolate costs twice as much thanks to tariffs. Photo: Funkystock/Getty Images

The United States imported $2.69 trillion in 2016. That includes $2.2 trillion in goods and $502 billion in services. 

America is the world's second-largest importer. The European Union imports more, at $2.24 trillion. China is third, importing $1.4 trillion. Combined, these countries import $5.8 trillion, or one-third of the world's total imports of $15.34 trillion. They’re the world's best customers.

 (Source: "Imports Rank Order," CIA World Factbook.) 

What Does America Import?

The largest U.S. import category is capital goods at $590 billion. Businesses import $123 billion in telecommunications and semiconductors. They also import $114 billion in computers and related equipment.

Consumer goods is almost as large, at $584 billion. Most of this is cell phones and TVs ($121 billion). Next is apparel and footwear ($114 billion) and pharmaceutical preparations ($112 billion).

U.S. manufacturers import $444 billion of industrial supplies. Of this, $144 billion is oil and petroleum products. The United States also imports $350 billion worth of automobiles and $130 billion in food. 

Services is a large and growing category. In 2016, U.S. service imports totaled $502 billion. Almost half was travel and transportation services, at $219 billion. The next was computer services and other business services, at $139 billion.

Finance and insurance services were $73 billion. Government services was $21 billion. (Source: "U.S. International Trade in Goods and Services," Exhibit 8. Exports. U.S. Commerce Department.) 

More than half of U.S. imports come from five countries: China, Canada, Mexico, Japan and Germany. For specifics, see U.S. Imports from Top 5 Countries by Year.

Imports and the Trade Deficit

The United States imports more than it exports. That's despite being the third-largest exporter in the world. The biggest exporters are the European Union and China. That creates a U.S. Trade Deficit of $502 billion.  Even though America exports billions in oil, consumer goods and automotive products, it imports even more of those same categories.  For more, see Components of U.S. Imports and Exports

Do Imports Cost U.S. Jobs?

Everything that is imported is obviously not made in the U.S.A. For that reason, it creates U.S. unemployment.  

The biggest change occurred with the growth of imports from China. In 2007, 28 percent of all imports were from China and other low-income countries. This was a dramatic rise from 2000, when this value was only 15 percent.

At the same time, the United States was losing manufacturing jobs. A study found that in 2000, more than 10 percent of the labor force worked in manufacturing. By 2007, it had dropped to 8.7 percent. Not all of these losses were from outsourcing. Some were from the rise in robotics. (Source:  "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, 2013.)

The study also found that job losses hit some communities harder than others. The cities and towns that lost out to Chinese competition also experienced higher costs for unemployment compensation, disability payments, health care and early retirement. A study by Illinois Wesleyan University showed that  $1 billion in imports from China reduced U.S. manufacturing by 0.48 percent. 

At the same time, imports do create U.S. jobs in transportation, distribution and marketing. For example, the Heritage Foundation estimated that imports from China created 500,000 of these jobs. But it's unlikely that these job gains offset the job losses in manufacturing.

(Source: "Trade Freedom: How Imports Create U.S. Jobs," The Heritage Foundation, September 12, 2012.)

Why Can't We Make It at Home?

Although America CAN produce all it needs, China, Mexico and other emerging market countries can produce it for less. Their cost of living is lower, which allows them to pay their workers less. That makes them better at producing what U.S. consumers want than American companies are. This is called the theory of comparative advantage.

For example, Indian technology companies can pay their workers just $7,000 a year, much lower than the U.S. minimum wage. In other words, there's trade-off between plentiful U.S. jobs and low-cost products. For more, see How IT Outsourcing Affects the Economy.

Many people say we should only buy items that are "Made in America." That would solve the problem only if everyone were willing to pay higher prices. 

President Trump wants to force Americans to make this trade-off. He threatens China and Mexico with higher tariffs on their imports. He has pulled the United States out of the Trans-Pacific Partnership and threatens to do the same with the North American Free Trade Agreement.  That will create more U.S. manufacturing jobs while raising the prices of most imports. Those higher costs may in turn put many U.S. companies out of business. Find out What Happens If Trump Dumps NAFTA.

How the U.S. Imports Are Part of the Balance of Payments

What Is the Balance of Payments?

  1. Current Account
  2. Capital Account
  3. Financial Account