Imports Surge Drives U.S. Trade Deficit to Record High in December

The U.S. trade deficit reached an all-time high of $70.3 billion in December due to increased imports despite earlier tariffs. The goods trade gap hit $1.24 trillion, and economists projected a narrowing of the deficit. The report also noted shifts in import and export categories, affecting GDP growth estimates.

The U.S. trade deficit soared to a record high of $70.3 billion in December, according to data released by the Commerce Department's Bureau of Economic Analysis and Census Bureau on Thursday. Despite President Donald Trump's tariffs aimed at curbing the import of foreign goods, the trade gap widened significantly by 32.6%.

Economists, who had expected a reduction to $55.5 billion, were surprised by the increase. The goods trade gap expanded by 2.1% to reach a historic high of $1.24 trillion. The surge in imports, which rose by 3.6% to $357.6 billion in December, was driven by increases in industrial supplies, non-monetary gold, copper, and crude oil.

While imports saw a broad increase, particularly in capital goods, exports faced challenges with a 1.7% decline to $287.3 billion. This situation could lead economists to revise GDP growth estimates for the fourth quarter, with an expectation of a 3.0% annualized growth rate, following a stronger third quarter performance.