Many people worry about the large U.S. trade deficit, but the sources of that deficit get much less attention.  The large and growing cost of imported oil is one source, but not the only one. And while there are trade deficits in some sectors, these are partly offset by trade surpluses in others. The U.S. trades a large number of goods and services with other countries, and focusing on the overall trade deficit alone masks the great variation in trade flows.

It may come as a surprise to many that, in 2007, there was a $119 billion surplus in services trade. This partly offset an $819 billion deficit in the trade of goods, for a net trade deficit of $700 billion, or 5 percent of GDP. This is down from $753 billion in 2006.

In the goods category, the tables below show that there were large trade deficits in Industrial Supplies, Automotive Vehicles, and Consumer Goods. The values of imports of Industrial Supplies (which includes imports of oil and petroleum-based products) and Automotive Vehicles were each twice that of exports. The value of Consumer Goods imports was three times that of exports. There were slight export surpluses in Food & Feed and in Capital Goods.

In the service sector, the largest trade surpluses were in Private Services and in the payment of Royalties and Licensing fees. The Private Services category includes a broad range of business, technical, financial, and insurance services, as well as "purchase and sale of securities and noninterest income of banks." There was also a slight surplus in Travel, which is the sum of all expenses associated with foreign travel, including lodging, tourism, and food. Here, imports refer to American stays abroad and exports refer to visits to America by foreigners.

Trade is a complex dynamic that can change greatly over time. In part II, we will look at changes in the trade balance that have taken place in the past year.