ABC analysis of USA’s trade deficits

Supply Chain Professionals are working in a chaotic phase of global readjustment triggered by USA’s point of view anchored around trade deficits.

For decades, Businesses in general& Supply Chains in particular have relied on ABC analysis to find priority for financial control. This short article is to decipher based on a Supply Chain this practice used.

International Trade Centre data of USA trade deficits shows that

• USA has trade surplus with 118 countries
• USA has trade deficit with 99 countries.

Of the 118 countries only 6 of the countries make up for 70% contribution to net trade deficit,

1. China contributes 26
2. Mexico contributes 14%
3. Vietnam contributes 9%
4. Germany contributes 7%
5. Canada contributes 7%
6. Japan contributes 7%

Of the total 97 HS codes only 4 contribute to 70% of the total net trade deficit

1. Code ’85 (Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television ...) contributes 23%
2. Code ’87 (Vehicles other than railway or tramway rolling stock, and parts and accessories thereof) contributes 20%
3. Code ’84 (Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof) contributes 20%
4. Code ’30 (Pharmaceutical products) contributes 7%
5. China contributes to the largest imports of Code ’85.

A simple approach of ABC which Supply Chain professionals & Business in general have used over many decades is what I have used above to bring some clarity.

Data source: International Trade Centre