Travel Can Help Narrow the Gap in Record-High Trade Deficit
March 07, 2019 By U.S. Travel Association
The Commerce Department announced on Wednesday the U.S. registered its largest-ever trade deficit in 2018—to the tune of $891.2 billion. Additionally, the U.S. merchandise trade deficit with China was a record-breaking $419 billion.
While ongoing U.S.-China trade talks may result in a narrowing of the merchandise trade gap, there is an industry that continues to run a trade surplus with China: travel. In 2017, the U.S. had a $29.8 billion travel trade surplus with China.
People don’t always think of travel as an export. But just as China exports products like Nike shoes or Lenovo laptops to the U.S., America is exporting air travel and hotel bookings to the Chinese market. China is the third-largest source market for all overseas visitation to the U.S., and Chinese visitors are by far the biggest spenders out of all international visitors, shelling out an average of $6,700 per trip.
The Chinese market has grown considerably in the past 20 years, jumping from the 22nd-largest source market in 2000 to its current third-place ranking—and it will only get bigger and more influential. By 2020, China is projected to leapfrog Japan to become the second-largest source market.
The U.S. should capitalize on this growing market and the trade surplus we already enjoy. Making travel to the U.S. easier by streamlining the visa process for legitimate business and leisure travelers and reducing wait times at Customs entry points can help bolster visitation—and in turn, help slash our overall trade deficit.
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