U.S. Trade Deficit Hits Record High Amid Tariff Tensions

In December, the U.S. trade deficit sharply widened to $98.4 billion, driven by a surge in imports amid tariff threats. Commerce Department data indicates this marks the highest deficit since March 2022. Tariffs on Mexican, Canadian, and Chinese goods contributed to rising import levels while export numbers declined.


Devdiscourse News Desk | Washington DC | Updated: 05-02-2025 19:15 IST | Created: 05-02-2025 19:15 IST
U.S. Trade Deficit Hits Record High Amid Tariff Tensions
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The United States trade deficit expanded significantly in December, rising to 24.7% and reaching $98.4 billion—the largest since March 2022. This increase comes as imports hit a record high amid ongoing tariff threats, according to the Commerce Department's Bureau of Economic Analysis' latest report released on Wednesday.

Analysts had anticipated the trade gap to rise to $96.6 billion, up from a revised $78.9 billion for November. On Monday, President Donald Trump delayed a 25% tariff on products from Mexico and Canada, set to resume the following month. Meanwhile, a 10% tariff on Chinese goods began on Tuesday, further impacting trade dynamics.

The White House justified the tariffs as measures to pressure Mexico, Canada, and China into enforcing immigration and drug-related promises. Imports rose by 3.5% to an unprecedented $364.9 billion, while exports dropped by 2.6% to $266.5 billion. Despite this, the fourth-quarter GDP estimate showed trade having a neutral impact on economic growth, which progressed at an annualized rate of 2.3%.

(With inputs from agencies.)

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