Foreign trade of the United States


The regulation of foreign trade is constitutionally vested in the United States Congress. After the Great Depression, the country emerged as among the most significant global trade policy-makers, and it is now a partner to a number of international trade agreements, including the General Agreement on Tariffs and Trade and the World Trade Organization. Gross U.S. assets held by foreigners were $16.3 trillion as of the end of 2006.
The United States is among the top three global importers and exporters. The country has trade relations with many other countries. Within that, the trade with Europe and Asia is predominant. To fulfill the demands of the industrial sector, the country has to import mineral oil and iron ore on a large scale. Machinery, cotton yarn, toys, mineral oil, lubricants, steel, tea, sugar, coffee, and many more items are traded. The country's export list includes food grains like wheat, corn, and soybeans, as well as aeroplanes, cars, computers, paper, and machine tools required for different industries. In 2016 United States current account balance was negative $469,400,000,000. U.S. manufacturers exported $1,365.31 billion in goods exports in 2019, with Canada, Mexico, China, Japan and the United Kingdom representing 35.44% of the export market.
Relatively few U.S. companies export; a 2009 study reported that 18% of U.S. manufacturers export their goods. Exporting is concentrated to a small number of companies: the largest 1% of U.S. companies that export comprise 81% of U.S. exports.

Institutional framework

Congressional authority over international trade

The authority of Congress to regulate international trade is set out in the United States Constitution :

The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and to promote the
general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States

Congressional authority over international trade includes the power to impose tariffs and to establish tariff rates; implementing trade agreements; providing remedies against unfairly traded imports; controlling the export of sensitive technology and extending tariff preferences to imports from developing countries. Over time, and under carefully prescribed circumstances, Congress has delegated some of its trade authority to the Executive Branch. Congress, however, has, in some cases, kept tight reins on the use of this authority by requiring that certain trade laws and programs be renewed; and by requiring the Executive Branch to issue reports to Congress so the latter can monitor the implementation of the trade laws and programs.

Internal institutions

American foreign trade is regulated internally by:
has varied widely through various American historical and industrial periods. As a major developed nation, the U.S. has relied heavily on the import of raw materials and the export of finished goods. Because of the significance for American economy and industry, much weight has been placed on trade policy by elected officials and business leaders.
According to economic historian Douglas Irwin, tariffs have historically served three main purposes: generating revenue for the federal government, restricting imports to protect domestic producers, and securing reciprocity through trade agreements that reduce barriers. The history of U.S. trade policy can be divided into three distinct eras, each characterized by the predominance of one goal. From 1790 to 1860, revenue considerations dominated, as import duties accounted for approximately 90% of federal government receipts. From 1861 to 1933, the growing reliance on domestic taxation shifted the focus of tariffs toward protecting domestic industries. From 1934 to 2016, the primary objective of trade policy became the negotiation of trade agreements with other countries. The three eras of U.S. tariff history were separated by two major shocks—the Civil War and the Great Depression—that realigned political power and shifted trade policy objectives.
Political support by members of Congress often reflects the economic interests of producers rather than consumers, as producers tend to be better organized politically and employ many voting workers. Trade-related interests differ across industries, depending on whether they focus on exports or face import competition. In general, workers in export-oriented sectors favor lower tariffs, while those in import-competing industries support higher tariffs.
Because congressional representation is geographically based, regional economic interests tend to shape consistent voting patterns over time. For much of U.S. history, the primary division over trade policy has been along the North–South axis. In the early 19th century, a manufacturing corridor developed in the Northeast, including textile production in New England and iron industries in Pennsylvania and Ohio, which often faced import competition. By contrast, the South specialized in agricultural exports such as cotton and tobacco.
In more recent times, representatives from the Rust Belt—spanning from Upstate New York through the industrial Midwest—have often opposed trade agreements, while those from the South and the West have generally supported them. The regional variation in trade-related interests implies that political parties may adopt opposing positions on trade policy when their electoral bases differ geographically. Each of the three trade policy eras—focused respectively on revenue, restriction, and reciprocity—occurred during periods of political dominance by a single party able to implement its preferred policies.
During the Civil War, leaders of the Confederacy were confident that Britain would come to their aid because of British reliance on Southern cotton. The Union was able to avoid this, through skillful use of diplomacy and threats to other aspects of European-U.S. trade relations.
The 1920s marked a decade of economic growth in the United States following a Classical supply side policy. U.S. President Warren Harding signed the Emergency Tariff of 1921 and the Fordney–McCumber Tariff of 1922. Harding's policies reduced taxes and protected U.S. business and agriculture. Following the Great Depression and World War II, the United Nations Monetary and Financial Conference brought the Bretton Woods currency agreement followed by the economy of the 1950s and 1960s. In 1971, President Richard Nixon ended U.S. ties to Bretton Woods, leaving the U.S. with a floating fiat currency. The stagflation of the 1970s saw a U.S. economy characterized by slower GDP growth. In 1988, the United States ranked first in the world in the Economist Intelligence Unit "quality of life index" and third in the Economic Freedom of the World Index.
Near the end of the Second World War U.S. policy makers began to experiment on a broader level. In the 1940s, working with the British government, the United States developed two innovations to expand and govern trade among nations: the General Agreement on Tariffs and Trade and the International Trade Organization. GATT was a temporary multilateral agreement designed to provide a framework of rules and a forum to negotiate trade barrier reductions among nations.
The growing importance of international trade led to the establishment of the Office of the U.S. Trade Representative in 1963 by Executive Order 11075, originally called The Office of the Special Representative for Trade Negotiations.
In 2013 the United States' largest trading partner was Canada.
In 2018, the year that a trade war with China was launched by U.S. President Donald Trump, the U.S. trade deficit in goods reached $891 billion, which was the largest on record before the $1,183 billion deficit in the trade of goods recorded in 2021. By the end of the Trump presidency, the trade war was widely characterized as a failure.
On July 27, 2025, the United States and the European Union concluded a trade agreement, providing for 15% tariffs on European exports. The deal was announced by President Donald Trump and President of the European Commission, Ursula von der Leyen, at Turnberry, Scotland. European states committed to $750 billion in energy purchases and $600 billion in additional investments in the United States.

Recent U.S. Tariff Policy Developments

In January 2026, U.S. President Donald Trump threatened to impose a 100 percent tariff on Canadian imports if Canada proceeded with a potential trade agreement involving the People’s Republic of China. Trump stated that Canada could serve as a conduit for Chinese goods entering the U.S. market, and indicated that tariffs could be imposed immediately. The announcement occurred amid ongoing tensions in U.S.–Canada trade relations and broader discussions over trade policies with China. Canadian officials clarified that Ottawa was not pursuing a comprehensive free trade agreement with China, and noted that recent discussions were limited to addressing specific tariff issues.

Balance of trade

The US last had a trade surplus in 1975. In 1985, the United States began running a persistent trade deficit with China. During the 1990s, the overall U.S. trade deficit expanded, particularly with Asian economies. By 2012, the U.S. trade deficit, along with the federal budget deficit and public debt, reached record or near-record levels.
Though the U.S. trade deficit has been stubborn, and tends to be the largest by dollar volume of any nation, even the most extreme months as measured by percent of GDP there are nations that are far more noteworthy. Case in point, post 2015 Nepal earthquake, Nepal's trade gap was a shocking 33.3% of GDP although heavy remittances considerably offset that number. According to the U.S. Department of Commerce Bureau of Economic Analysis, January 27, 2017, report, the GDP "increased 4.0 percent, or $185.5 billion, in the fourth quarter of 2016 to a level of $18,860.8 billion."
Over the long run, nations with trade surpluses tend also to have a savings surplus. The U.S. generally has developed lower savings rates than its trading partners, which have tended to have trade surpluses. Germany, France, Japan, and Canada have maintained higher savings rates than the U.S. over the long run.
According to Carla Norrlöf, there are three main benefits to trade deficits for the United States:
  1. Greater consumption than production: the US enjoys the better side of the bargain by being able to consume more than it produces
  2. Usage of efficiently produced foreign-made intermediate goods is productivity-enhancing for US firms: the US makes the most effective use of the global division of labor
  3. A large market that other countries are reliant on for exports enhances American bargaining power in trade negotiations