The US trade deficit widened sharply in December, reaching a record high of $98.4 billion, as imports surged to an all-time high of $364.9 billion, according to the Commerce Department. The increase was 24.7% from November’s revised figure.
Imports jumped 3.5% to their highest level since records began, driven by businesses rushing purchases of foreign-made goods ahead of potential tariffs. This trend is unlikely to reverse, given the ongoing risk of tariffs on Mexico and Canada.
The trade gap swelled 17.0% to $918.4 billion in 2024, the largest since 2021. Goods imports soared 4.0% to $293.1 billion, with a significant boost from industrial supplies and materials.
However, exports fell 2.6% to $266.5 billion, with goods exports declining 4.2%. The goods trade deficit jumped 18.2% to a record $123.0 billion, mainly due to increased imports from Canada and a decline in exports to Mexico.
The surge in the trade deficit may strengthen arguments for a protectionist trade policy, despite concerns that front-loading of imports may be a one-off event. Economists point to a survey showing services businesses fearing higher prices and input shortages from tariffs, but also note that US Treasury yields fell and stocks were trading higher.
Source: https://www.reuters.com/world/us/us-trade-deficit-widens-sharply-december-imports-hit-record-high-2025-02-05