Dear friends and colleagues:
The CFR Global Imbalances Tracker is updated.
The U.S. current account deficit widened from 3.3% of GDP in 2023 to 4% in 2024—a post-2008 high—before rising further to 4.4% in Q2 2025, driven by front-running of anticipated tariffs. China absorbed much of this demand, with its surplus rising to 3.2% of GDP, while surpluses also broadened across East Asia. South Korea’s surplus jumped to 5.9% on the back of AI-driven semiconductor demand. On the deficit side, Saudi Arabia swung from an enormous 11.7% surplus in 2022 to a 3.6% deficit, driven by a sharp fall in oil-related export revenues. Taken together, global imbalances now stand at their widest since the global financial crisis. This fact defies the efforts of the Trump administration to reduce imbalances through the imposition of global tariffs—efforts criticized as damaging and futile by the vast majority of macroeconomists.
Be sure also to check out our new CFR Global Inflation Tracker, which covers nearly 200 countries over the past quarter century. Yours, |
