U.S. Trade Deficit Remains Near Record High as Imports Surge Despite Tariffs

by Emmitt Barry, Worthy News Washington D.C. Bureau Chief

(Worthy News) – The U.S. trade deficit edged slightly lower in 2025 but remained the third-largest on record, underscoring the scale of America’s global trade imbalance even amid sweeping tariffs imposed by President Donald Trump.

According to new data released Feb. 19 by the Bureau of Economic Analysis, the 2025 trade gap totaled $901.5 billion, down just 0.2 percent from 2024.

Imports climbed 4.8 percent to a record $4.33 trillion, driven largely by foreign-made computers and related accessories. Exports rose more than 6 percent to $3.43 trillion, boosted by shipments of nonmonetary gold, finished metal shapes, and natural gas.

Economists note the annual figures may reflect a first-quarter surge in imports, as companies rushed to front-run the administration’s new sectoral and reciprocal tariffs before they fully took effect later in the year. Trade flows stabilized in subsequent months.

Shifting Trade Gaps

The United States narrowed its trade deficits with key partners in 2025.

The shortfall with the European Union fell 7 percent to $219 billion, while the U.S.–China gap dropped 28 percent to $202 billion.

At the same time, deficits widened significantly with Vietnam and Taiwan, reaching $178 billion and $147 billion, respectively. The U.S.–Mexico deficit also expanded to $197 billion. Analysts have raised concerns that some goods may be routed through third countries to circumvent tariffs aimed at China.

On a monthly basis, the trade deficit jumped 33 percent in December to $70.3 billion, as imports rose 3.6 percent and exports fell nearly 2 percent.

Tariff Impact Debate

The administration has argued that tariffs are reshaping global trade in America’s favor. President Trump said earlier this week that the deficit had “plummeted” due to tariff revenue and predicted it would move into positive territory this year.

The current effective tariff rate stands at 16.9 percent, up sharply from roughly 2.3 percent when Trump returned to office.

However, economists at the Federal Reserve Bank of New York estimate that U.S. firms and consumers are absorbing about 86 percent of tariff costs, with foreign exporters covering the remainder. In a recent paper, researchers concluded that tariffs have pushed up import prices and prompted companies to reorganize supply chains.

White House officials strongly criticized the study. National Economic Council Director Kevin Hassett dismissed it as deeply flawed and politically driven, saying the administration remains confident its trade strategy is strengthening American industry.

Supreme Court Test Ahead

A major legal challenge looms as the Supreme Court weighs whether the president acted within his authority under the International Emergency Economic Powers Act when imposing certain tariffs.

President Trump has warned that a ruling against the administration could create financial and legal complications involving hundreds of billions of dollars. Officials say alternative legal authorities are available to preserve the administration’s trade objectives if necessary.

Meanwhile, some Republican lawmakers have expressed concern. The House recently voted 219–211 to overturn tariffs on Canada, though the measure is unlikely to survive a presidential veto.

With new GDP and inflation data due Feb. 20, the trajectory of trade, tariffs, and their broader economic effects will remain central to the administration’s economic agenda in the months ahead.

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