State of the Middle Class
Trade Balance and NIIP
U.S. Struggles with Large Trade and Investment Deficits
In 1945, the U.S. produced half of the world’s goods. Now we manufacture less than our competitors and buy more than we sell. This is called a trade deficit, and it has grown significantly over the decades. Meanwhile, countries who sell to us use their earnings to buy up investments in the U.S. We’re strengthening our competitors’ economies while weakening our own.
Manufactured goods trade deficits have skyrocketed
The United States’ accumulated trade deficits with its major competitors like China, Japan, and Germany now measure in the trillions. Our shift from mostly manufacturing and selling products to largely buying from our competitors is a power shift that makes us vulnerable on many levels.
US Cumulative Trade Deficit
in Trillions USD
Top 5 Deficits by Trading Partner
in Trillions USD
Monthly trade deficits remain high
Yearly U.S. trade deficits in physical goods have consistently exceeded $1 trillion per year. The monthly numbers show we have our largest deficits with Mexico, China, and other Asian countries.
U.S. Goods Trade Deficit for June 2026 (Billions of USD)
No Data Found
No Data Found
Investment deficits make us a debtor nation
The rest of the world owns more of our companies, equipment, stocks, and bonds than we own of theirs. This is measured by NIIP (net international investment position). The negative NIIP in the U.S. indicates we have large investment deficits with other nations — we are a debtor nation. That makes us more dependent on foreigners to invest in our production and more susceptible to economic downturns and crises if we do not control our production.