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The trade deficit widened in March as imports outpaced exports. The U.S. trade deficit in goods and services widened to a seasonally adjusted $140.5 billion in March from an upwardly revised $123.2 billion in February — a 14% monthly increase. The deficit in goods widened by $16.5 billion while the surplus in services trade fell by $800 million. The trade deficit is a measure of the difference between what the United States buys from foreign nations and what it sells overseas. The March data show U.S. companies getting ahead of U.S. tariffs by fast-tracking orders before the reciprocal tariffs were supposed to go into effect. Many of these tariffs were scaled back or postponed by President Trump. Year-to-date, exports have increased 5.2%, while imports have increased 23.3% from the same period a year ago. While softening economic activity in advanced economies will weigh on demand for U.S. goods and services abroad, the recent weakness of the dollar may offset some of the weaker overseas demand for US products.
Exports were flat in March. Total exports rose 0.2% from the previous month, growing on the back of stronger sales of industrial supplies and materials. Outbound shipments of autos and parts also picked up, while exports of capital goods fell, largely due to lower sales of civilian aircraft. Exports of services fell by $900 million due to a 7.1% decline in travel exports, which includes travel spending by foreign visitors in the United States. The prospects of a trade war seem to have prompted firms abroad to rush orders in March, to avoid retaliatory tariffs levied on U.S. goods by their own governments.
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Imports were high again in March as U.S. businesses scurried to beat tariffs. Total imports rose 4.4%, following a record increase in February. Imports of goods soared 5.4% to a record $346.8 billion. Imports of consumer goods and capital goods continued to grow in March, led by purchases of cell phones, pharmaceuticals, computer accessories and civilian aircraft. Imports have outpaced exports on average over the past 10 months. The rush to beat tariffs saw imports from Mexico, the United Kingdom, Ireland, the Netherlands, Belgium, France, Germany, Italy, India and Vietnam Nam hitting all-time highs. Imports from China, however, were the lowest since March 2020.
Source: Department of Commerce, Trade Data
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