BY LUCIA MUTIKANI
WASHINGTON—The US trade deficit widened to a record high in March as businesses boosted imports of goods ahead of President Donald Trump’s sweeping tariffs, which dragged gross domestic product into negative territory in the first quarter for the first time in three years.
The report from the Commerce Department on Tuesday showed the nation imported a record amount of goods from 10 countries, including Mexico and Vietnam. Imports from China were, however, the lowest in five years and could drop further as Trump has hiked duties on Chinese goods to a staggering 145 percent.
There are reports of a massive decline in cargo from China.
While reciprocal tariffs with most US trade partners were suspended for 90 days, duties on Chinese goods came into effect in early April, triggering a trade war with Beijing. Economists expect the front-running of imports probably persisted in April.
“Businesses are clearly scrambling as they try to find a way through this time of unprecedented change, but the worst is undoubtedly yet to come because the import tariff collections did not start to roll in earnest until after the White House ‘Liberation Day’ announcement on April 2,” said Christopher Rupkey, chief economist at FWDBONDS. “There are still no trade deals announced in Trump 2.0.”
The trade gap jumped 14.0 percent, or $17.3 billion, to a record $140.5 billion, the Commerce Department’s Bureau of Economic Analysis said. Economists polled by Reuters had forecast the trade deficit would rise to $137.0 billion.
Imports vaulted 4.4 percent to an all-time high $419.0 billion. Goods imports soared 5.4 percent to a record $346.8 billion. They were boosted by a $22.5 billion jump in consumer goods to an all-time high, mostly made up of pharmaceutical products from Ireland. Trump has promised to impose duties on pharmaceutical goods.
Capital goods imports increased $3.7 billion to a record high, reflecting a solid rise in computer accessories. Imports of automotive vehicles, parts and engines increased $2.6 billion, driven by passenger cars.
But imports of industrial supplies declined $10.7 billion amid a $10.3 billion decrease in finished metal shapes, likely silver, and a $1.8 billion drop in non-monetary gold, which had accounted for the wider trade gap in the prior two months.
Economists said this data suggested capital flight out of the US dollar as the White House’s ever-changing tariffs policy spooked investors. Crude oil imports fell $1.2 billion.
“The post-November elections period from December 2024 to March 2025 saw a cumulative hoarding of offshore gold and silver bullion on a year-over-year basis of $92.5 billion,” said Brian Bethune, an economics professor at Boston College. “This ‘parking’ of scarce US savings into non-productive, non-income earning assets has negative consequences for the US dollar.”
