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The persistence of The US maintains the largest trade deficit in the world is linked to the role of the dollar as a global currency and the privilege of issuing the currency used in international transactions, which allows the country to buy more than it sells without compromising its immediate economic position
The United States continues to have the largest trade deficit on the planet, importing more goods and services than it exports. In July 2025, the negative balance of the American trade balance reached US $ 78,3 billion, driven by rising imports and strengthening domestic demand.
This imbalance, which for other countries would represent a sign of fragility, is sustained because the US dollar remains the primary global reserve and trade currencyThe currency's dominant position allows the US to finance recurring deficits by issuing the very currency the entire world needs to do business.
How the US Trade Deficit Works
A trade deficit occurs when a country's imports exceed its exports.
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In the case of the USA, foreign purchases consistently exceed sales, generating a negative balance that, in 2025, remains between $60 to $80 billion per month.
In March of that year, the record reached US $ 136 billion, according to the Department of Commerce.
The difference is covered by the issuance of bonds and international confidence in the dollar.
Other countries agree to finance the US by buying these papers., because they need dollars for their own business operations.
This cycle keeps the global gears turning, even as the US deficit grows.
The role of the dollar as a global reserve currency
The dominance of the dollar began after World War II, with the Bretton Woods agreements, and was consolidated in the following decades.
Currently, about 46% of the world's international reserves are in dollars, according to IMF data for the first half of 2025, although this share has fallen compared to 60% recorded in 2015.
Even though it is falling, the dollar continues to be the main reference in international transactions, especially in strategic commodities such as oil, gas and grains.
To import these products, countries must first acquire dollars, which maintains a permanent demand for the American currency.
The “exorbitant privilege” of the United States
This mechanism is known as “exorbitant privilege”, an expression coined by the French economist Valéry Giscard d'Estaing in the 1960s.
It describes the US ability to issue its own currency to pay for imports and finance external debts.
While other countries need to balance their external accounts, the United States can buy more than it produces without immediate risk of insolvency, as the world accepts the dollar as payment.
This supports a high consumption pattern, but also increases global dependence on American economic stability.
Long-term risks and changes in the global scenario
Despite its apparent comfort, the model presents risks.
A US public debt exceeded US$36 trillion in 2025, raising concerns about the sustainability of this system.
A gradual decline in the dollar's share of international reserves and the search for alternatives, such as the Chinese yuan and gold, indicate a slow movement of monetary diversification.
Some countries, including Brazil, have advocated bilateral trade agreements that reduce dependence on the dollar, especially within blocs like BRICS.
The progressive loss of exchange rate hegemony could, in the long run, limit capacity of the US to sustain such large deficits without inflationary or fiscal consequences.
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