US Trade Deficit by Country: Top 10 Countries Driving the Trade Gap

The U.S. recorded a historic $1.2 trillion goods trade deficit in 2024—the largest on record. So, who's behind America's ballooning trade gap? We break down the top deficit partners and what they mean for the supply chain.

From sourcing shocks to tariff traps, the U.S. trade deficit isn’t just an economic headline—it’s a map of vulnerabilities. Here are the 10 countries where the US trade gap runs deepest

1. China — $295B Deficit 🇨🇳

The US trade deficit with China narrowed to $295 billion in 2024, a sharp retreat from its $418 billion high in 2018. Imports hit nearly $500B, led by electronics, furniture, and industrial goods. Despite diversification talk, reliance on Chinese manufacturing is still strong. Reshoring efforts have yet to significantly dent the dependency.

Much of the US tech, retail, and consumer markets still depend on Chinese input. Nearly 70% of all smartphones and laptops sold in the US were made in China. For many categories, there’s simply no large-scale alternative yet, which keeps China locked into the top deficit spot.

2. Mexico — $172B Deficit 🇲🇽

Mexico is now America’s largest overall trade partner, thanks in part to a surge in nearshoring. In 2024, US imports from Mexico totaled more than $470 billion. Major U.S. imports from Mexico include cars, trucks, computers, appliances, food, and beer, underscoring the tight manufacturing and supply-chain ties across the southern border.

Much of US–Mexico trade flows duty-free under the USMCA, supporting integrated supply chains across autos, electronics, and agriculture—but in 2024, new tariffs were proposed and then paused, signaling rising tensions even within North America’s closest trade bloc.

3. Vietnam — $124B Deficit 🇻🇳

Vietnam crossed a symbolic milestone this year with a $124 billion trade gap with the US Apparel, furniture, and electronics continued to lead. The country has become a clear beneficiary of the China-plus-one sourcing strategy, with US companies flocking to its lower-cost base.

Yet the shift isn’t seamless. Vietnam’s dependence on Chinese materials—especially in textiles and hardware—remains a critical supply chain vulnerability. Around 60% of textile inputs are imported from China, limiting its independence.

4. Ireland — $87B Deficit 🇮🇪

Ireland’s trade deficit with the US is unique—it’s largely digital. More than half of the goods value comes from “related-party” transactions involving pharmaceuticals and software. Corporate IP and tax structures drive much of the recorded trade imbalance.

That said, physical goods matter too. US pharma imports from Ireland exceeded $40B in 2024. Major players like Pfizer and Apple use Ireland as a key production and distribution base, blending digital and tangible trade.

5. Germany — $85B Deficit 🇩🇪

The U.S.-Germany trade deficit remained steady in 2024 at $85 billion. Precision goods—like vehicles, industrial machinery, and medical equipment—continue to drive this relationship. Over $22 billion worth of German vehicles entered the US market last year alone.

However, the EU’s environmental tariffs and volatile energy prices are pushing up costs. US buyers are now weighing quality against rising landed costs, especially in machinery and high-end industrial components.

6. Taiwan — $74B Deficit 🇹🇼

Taiwan remains a vital partner in the global tech economy, especially for semiconductors. In 2024, chip-related imports from Taiwan surpassed $55 billion. US companies still rely heavily on Taiwanese fabs for advanced processors and electronics parts.

But there are growing concerns over geopolitical risk. Tensions around the Taiwan Strait, and US legislation pushing domestic chip production, are prompting supply chain realignments. For now, though, Taiwan stays irreplaceable.

7. Japan — $69B Deficit 🇯🇵

Japan continues to serve as a key industrial partner for the US, especially in the automotive and electronics sectors. In 2024, over 1.2 million Japanese-made vehicles entered the US, and major OEMs like Toyota and Honda dominated the flow.

Yet, the country’s structural challenges are mounting. Japan’s aging workforce and declining population are affecting industrial output and logistics. A weak yen also adds complexity to trade predictability and pricing.

8. South Korea — $66B Deficit 🇰🇷

Its booming battery and semiconductor sectors drive South Korea’s presence in the US goods deficit ranking. In 2024, EV battery components alone accounted for over $12 billion in imports. Korean firms are now deeply embedded in US electrification efforts.

The trade relationship is also evolving with growing US investment in Korean manufacturing. But supply chains remain sensitive to shifts in chip demand, energy prices, and regional competition from Japan and Taiwan.

9. Canada — $63B Deficit 🇨🇦

The U.S. logged a $63 billion trade deficit with Canada in 2024, driven largely by $98 billion in crude oil imports and $35 billion in vehicles, including cars, trucks, and parts. Energy and automotive trade continue to dominate the cross-border flow, reflecting Canada’s role as both a strategic supplier and manufacturing partner.

Although most U.S.–Canada trade remains duty-free under the USMCA, tensions rose in late 2024 with the announcement of new tariffs—25% on general goods and 10% on oil. These measures were ultimately paused, but they signaled potential policy shifts ahead, especially in sectors where trade imbalances are politically sensitive..

10. India — $46B Deficit 🇮🇳

In 2024, the United States recorded a trade deficit of $45.7 billion with India, marking a 5.4% increase from the previous year. U.S. exports to India totaled $41.8 billion, while imports from India reached $87.4 billion.

In response to proposed U.S. tariffs of up to 26% on Indian goods, India has offered a zero-tariff trade deal to the U.S., aiming to finalize an agreement during a 90-day negotiation window. High-level discussions, including a visit by India's Trade Minister Piyush Goyal to Washington, are underway to address market access and tariff concerns. Both nations are working towards an interim trade deal, with a long-term goal of increasing bilateral trade to $500 billion by 2030

What’s the US doing to address the trade deficit?

The US ran a record $1.2 trillion trade deficit in goods in 2024, the highest in history. This staggering gap between imports and exports reflects deep structural dependencies in American supply chains, particularly in electronics, automobiles, pharmaceuticals, and energy.

While the deficit is heavily concentrated among a handful of trading partners—China, Mexico, Vietnam, Canada, Ireland, and Germany—the US posted goods deficits with over 100 countries last year. In response, the Trump administration has revived a hardline trade agenda, announcing steep new tariffs on Canada, Mexico, and China as it seeks to rebalance global commerce and incentivize domestic production.

Key US trade deficit observations

• In 2024, the US racked up a combined trade deficit of $620 billion with its top five Asian trading partners—China, Japan, South Korea, Taiwan, and Vietnam—reflecting the region’s enduring role as the engine room of American imports.

• Notably, the deficit spiked to $153 billion in January 2025 alone, as importers rushed shipments ahead of new tariff rounds, underscoring how trade policy uncertainty continues to shape logistics and procurement strategies.

Product-Level Trends

When broken down by category, the largest US trade deficits in 2024 were concentrated in high-value manufactured goods. Leading the list were:

• Machinery

• Electrical equipment (including semiconductors and consumer electronics)

• Automobiles (especially passenger cars and parts)

• Pharmaceuticals

These categories reflect the US's continued reliance on global manufacturing hubs, particularly in Asia and Europe, for complex, high-volume components.

On the flip side, America’s top export surpluses were driven by:

• Aircraft, led by Boeing’s global sales

• Mineral fuels and oils, including refined petroleum and LNG

These sectors remain strongholds of US competitiveness, driven by advanced engineering, energy exports, and global aerospace demand.