Trade Deficit Is Near Record High Despite Tariffs

In a Truth Social post Wednesday night, President Trump said his tariffs had brought down the trade deficit by 78%, but government figures released the next day told a very different story. According to the Commerce Department, the gap between goods and services sold to the US and what it exports fell just 0.2% last year despite the sweeping tariffs, from $903.5 billion in 2024 to $901.5 billion, the Hill reports. That's the third-highest US trade deficit on record, reports the AP. Imports of goods and services climbed to an all-time high of $4.334 trillion, up about 5% from the previous record, while exports rose 6% to $3.432 trillion.

Tariffs rolled out worldwide in April were aimed in part at narrowing the imbalance in traded goods, but that deficit actually widened to a record $1.241 trillion from $1.215 trillion a year earlier, the Wall Street Journal reports. The US surplus in the trade of services like banking rose to $339 billion, up from $312 billion the previous year, per the AP.

• Last year featured sharp swings: imports and the deficit jumped in the early months of the year as firms rushed to beat expected tariffs, then dropped when those levies took effect in April, before stabilizing after some measures were later eased. Overall, goods imports for 2025 reached $3.44 trillion, about 4% higher than in 2024, indicating limited impact on Americans' appetite for foreign products, the Journal notes.

• December underscored the volatility. The monthly trade gap surged to $70.3 billion, according to Commerce Department figures, up 33% from November and far above Wall Street's $55.5 billion forecast. A steep $7.1 billion decline in gold exports—amid choppy financial trading in the metal—pushed total exports slightly down to $287.3 billion. Imports, meanwhile, rose 3.6% to $357.6 billion, driven by demand for digital hardware: computer accessories added $3.4 billion and telecommunications gear another $1.3 billion to the import bill.
• The deficit in the goods trade with China fell 32% to $202 billion last year, but the gap with Taiwan and Vietnam almost doubled, the AP reports. Economist Chad Bown at the Peterson Institute for International Economics says that could lead to the administration putting a "bulls eye" on the countries.