The $7 Trillion Trade

The Bureau of Economic Analysis has tracked every dollar that crosses the American border since 1960 — giving us a 65-year window into how the United States became the largest trading nation on Earth. In 1960, total exports were $26 billion and total imports were $22 billion. The trade was roughly balanced. America sold wheat, machinery, and automobiles; it bought coffee, oil, and raw materials. The whole enterprise fit into a number smaller than what Apple earns in a single quarter today.

By 2024, exports had reached $3.21 trillion and imports $4.13 trillion — a combined $7.37 trillion. America now trades more in a single week than it traded in all of 1960. But the two lines did not grow at the same rate. Exports multiplied 125-fold. Imports multiplied 184-fold. That asymmetry — a 59x gap in growth multiples — created the defining feature of modern American trade: the deficit.

The chart reveals five distinct eras in American trade:

The Balanced Era (1960–1975). For fifteen years, exports and imports grew in rough lockstep. America ran small surpluses — typically $2–5 billion per year. The U.S. was the world’s dominant manufacturer, selling jet aircraft, heavy machinery, and agricultural commodities. Imports were modest: petroleum, tropical goods, some European luxury products. Total trade doubled from $48 billion (1960) to $111 billion (1970), but both lines moved together. There was no gap to worry about.

The First Crack (1976–1985). In 1976, for the first time since World War II, America imported more than it exported. The deficit was tiny — just $2 billion — but it marked a structural shift. Two forces were at work: the 1973 oil embargo had quadrupled crude prices, sending the petroleum import bill surging, and the strong dollar of the early 1980s (driven by Volcker’s interest rate hikes) made American exports expensive and foreign goods cheap. By 1985, the deficit had ballooned to $122 billion. Total trade hit $494 billion — ten times the 1960 level.

The Globalization Wave (1990–2008). Three events transformed American trade: NAFTA opened the Mexican border in 1994, the Uruguay Round created the WTO in 1995, and China joined it in 2001. The containerization revolution — standardized shipping boxes that cut transport costs by 90% — made it economical to manufacture in Shenzhen and sell in Sioux Falls. Trade exploded. Total trade tripled from $1.15 trillion (1990) to $3.64 trillion (2006). But imports grew faster than exports in every single year. The deficit peaked at −$717 billion in 2006 — a number that seemed unfathomable at the time.

Crisis and Rebound (2009–2019). The Great Recession halved the deficit to −$363 billion in 2009 as American consumers stopped buying. But the contraction was temporary. As the economy recovered, imports surged right back. The deficit stabilized in the $400–$500 billion range through the 2010s, briefly improving as the shale revolution turned America into a net petroleum exporter. By 2019, total trade had reached $5.61 trillion — but the deficit was still −$616 billion.

The COVID Explosion (2020–2024). The pandemic produced the most violent swing in trade history. Total trade collapsed from $5.61 trillion (2019) to $4.91 trillion (2020) as supply chains seized up. Then came the recovery — and $5 trillion in fiscal stimulus that put cash directly into American wallets. Consumers bought everything: furniture, electronics, exercise equipment, imported goods of every description. Imports surged from $2.78 trillion (2020) to $3.95 trillion (2022). The deficit blew past $700 billion, then $800 billion, and by 2024 reached −$918 billion — the largest annual trade deficit in history.

The pace of trade growth has accelerated relentlessly. It took 30 years (1960–1990) to reach the first $1 trillion in total trade. The second trillion took 8 years (1990–1998). The third took 5 years. By the 2020s, America was adding a trillion dollars in trade every two years. From $5 trillion to $6 trillion took just 2021–2022. From $6 trillion to $7 trillion took 2022–2024.

Much of this acceleration reflects inflation and population growth, not just real expansion. But even adjusted for prices, the volume of goods crossing American borders has grown enormously. The average container ship calling at the Port of Los Angeles in 2024 carried more cargo than an entire month of shipping in 1960. The infrastructure of global trade — ports, ships, warehouses, logistics networks — has scaled to match.

The decade view makes the structural shift unmistakable. In the 1960s, America ran an average annual surplus of +$3 billion. By the 1980s, that had become an average deficit of −$102 billion. The 2000s averaged −$578 billion. And the 2020s (through 2024) are averaging −$767 billion — on track to be the worst decade in history.

The deficit hasn’t just grown — it has accelerated. Each decade is substantially worse than the last. The 1990s were 29% worse than the 1980s. The 2000s were 4.4 times worse than the 1990s. Even the “improvement” of the 2010s (−$548B average) was still five times larger than anything before the millennium.

The trade deficit is not, by itself, a sign of failure. It is partly a consequence of America’s unique position: the dollar is the world’s reserve currency, which means foreign governments and investors constantly buy dollars — keeping the currency strong and making imports cheap. Capital flows in, goods flow in, and the balance sheet says “deficit.” Whether that exchange is good or bad depends on what America does with the capital it receives — and what it stops making at home.

What the data makes clear is that the trade relationship is not balanced, and it hasn’t been for nearly 50 years. The gap that opened in 1976 did not close during the tech boom, the shale revolution, or even the pandemic’s supply chain shock. It grew. Understanding where that gap comes from — which countries, which products, which services — is the subject of the nine episodes that follow.