But in December the deficit narrowed slightly due to better US services exports.
The annual deficit for goods and services stood at $502.3 billion, up 0.4 percent compared to 2015 but 6.4 percent below the 2012 trade gap.
The deficit for December fell 3.2 percent from November to $44.3 billion, slightly below an analyst consensus forecast, partly due to robust growth in some US export sectors.
Services exports rose $63.8 billion in the final month of the year, and exports of advance technology goods hit $32.2 billion, the highest on record.
Auto-related exports to China, Canada and Mexico fell in the month.
However, the deficit in goods trade narrowed with several major trading partners in 2016, an issue that has been repeatedly flagged by President Donald Trump.
Americans imported fewer Chinese goods, lowering the trade deficit with that country by 5.4 percent to $347 billion last year despite falling auto exports.
The US deficit in goods with Germany also shrank 13 percent to $64.9 billion for the year.
However the imbalance with Mexico rose 4.3 percent to $63.2 billion.