In March, the U.S. trade deficit in goods and services surged to a record $140.5 billion, with a year-to-date increase of 92.6%. This rise is largely attributed to both consumers and companies ramping up imports in anticipation of higher global tariffs set to take effect on July 6. Imports rose by 23.3% year-to-date, with a notable $17.8 billion jump just last month. Conversely, U.S. exports saw a modest increase of only $500 million.
President Trump’s tariffs, which have already reached over 145% on China, are expected to further escalate. March import figures included an unprecedented upsurge in consumer goods, particularly pharmaceuticals, alongside heightened imports in apparel, furniture, jewelry, and household appliances. The U.S. GDP fell by 0.3% in the first quarter due to the most significant decline from net exports in over 50 years, as reported by Wells Fargo economists. Consumer spending also saw its slowest growth since mid-2023, increasing by just 1.8%.
Economists predict that the surge in imports may taper off in the second quarter, possibly allowing GDP to rebound. However, Goldman Sachs analysts indicate a 45% likelihood of a recession within the next year, citing potential new tariffs on pharmaceuticals and semiconductors. Meanwhile, Canada’s trade data revealed a 6.6% drop in exports to the U.S. for the second consecutive month, while exports to other nations rose, with crude oil being a key export to several countries including the U.K. and Germany.
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