The U.S. trade deficit widened to unprecedented levels in January as imports surged to the highest since mid-2019.
The gap between the goods and services the United States sold and what it bought abroad rose 1.9% to $68.2 billion from $67 billion in December, the Commerce Department reported Friday. Exports rose 1% to $191.9 billion, while imports increased 1.2% to $260.2 billion, the most since August 2019.
Imports of goods, not including services, increased $3.4 billion to a record $221.1 billion in January, led by pharmaceuticals, which rose $5 billion, or 39%, to $17.4 billion. Imports of services fell about 1%.
The imported-goods figure exceeded the previous record of $218.9 billion set in October 2018.
U.S. exports of goods rose $2.1 billion to $135.7 billion in January, while exports of services, like transport and travel, declined $0.3 billion to $56.3 billion.
The politically sensitive trade gap with China fell 3.2% to $27.2 billion. The trade deficit with Mexico rose $1.6 billion to $11.9 billion in January.
The coronavirus has upended trade in services such as education and travel, sections of the economy in which the United States runs persistent surpluses. Measured in dollars, monthly exports of U.S. services have declined by nearly one-fourth since the virus outbreak about a year ago.
Year-over-year, the goods and services deficit climbed to $23.8 billion, or 53.7%, from January 2020.
Last month, the Commerce Department reported that in 2020, the U.S. trade deficit rose 18.1% to $682 billion, the highest since 2008, as the coronavirus threw global commerce into disarray.
Friday's January trade data release is the last to include the period covering former President Donald Trump's administration. The pandemic played a pivotal role in spoiling Trump's four-year push to rebalance the deficit, with covid-19 crimping demand and upending supply chains.
The Trump administration imposed hundreds of billions of dollars of tariffs on the European Union and on China, sparking a trade war that hurt U.S. manufacturing and agriculture even as it protected some slices of industry like steel-makers.
President Joe Biden and his team have so far tiptoed around Trump's hard-line trade policies. Biden hasn't called off Trump's trade war with China or suggested he would scale back the tariffs on imported steel and aluminum.
A global shortage of semiconductors has idled production at some auto plants and prompted Biden to direct his administration to address shortfalls in output of the chips as it reviews supply chains. Automakers are cutting workers' hours because of the lack of semiconductors needed for everything from transmissions to touchscreens, and unions are raising alarm about the prospect of layoffs.
Exports of U.S. autos fell the most since May, dropping 5% to $12.6 billion.
The value of imports of semiconductors increased to $5.02 billion in January; they peaked at $5.7 billion last March. Despite the shortages in the U.S., exports of the chips climbed to $5.2 billion.
Biden's pick for his administration's top trade negotiator, Katherine Tai, has promised to make sure U.S. trade policy benefits America's workers, not just corporations, and to engage more with U.S. allies to counter an increasingly assertive China.
Tai is waiting to be confirmed by the full Senate. Fluent in Mandarin, Tai spent several years as the Office of the U.S. Trade Representative's head of China enforcement.
Information for this article was contributed by Matt Ott of The Associated Press and by Eric Martin of Bloomerg News (WPNS).