The US trade deficit in goods expanded to a new record in 2025, government data showed Thursday, February 19, despite sweeping tariffs that President Donald Trump imposed during his first year back in the White House.
The US goods deficit stood at $1.24 trillion for all of last year, widening slightly from 2024's level to its biggest in Commerce Department figures dating back to 1960. But the trade gap in goods with China narrowed for the full year, as US imports from the world's second-biggest economy dropped by 30%. When both goods and services were considered, the overall US trade deficit for 2025 narrowed to $901.5 billion, from $903.5 billion in 2024.
In the month of December, the overall deficit grew more than expected by 32.6% to $70.3 billion, as exports fell and imports climbed.
Trade flows involving the world's biggest economy were heavily swayed in 2025 as Trump slapped fresh tariffs on goods from virtually all trading partners after returning to the presidency, as part of a push to reduce the US trade gap. His moves brought the average effective tariff rate to its highest since the 1930s.
Chad Bown of the Peterson Institute for International Economics told reporters Thursday that the uptick in imports was likely due in part to the United States' artificial intelligence build-out. This covers high-tech imports like advanced semiconductors, primarily manufactured in Taiwan, that eventually go towards data centers.
