Trade Deficit Widens as Surging Imports Outpace Gold-driven Export Growth
The expansion in the February trade gap reflects a recovery in imports that offset a substantial jump in gold exports.
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The U.S. trade deficit widened in February, rising to $57.3 billion from a revised $54.7 billion in January. This $2.7 billion expansion followed a sharp narrowing the previous month, and was driven by a $15.2 billion surge in imports that outstripped a $12.6 billion increase in exports. A significant portion of the export growth was once again propelled by the volatile trade of nonmonetary gold (gold not held as a reserve asset by monetary authorities). Trade patterns have swung abruptly from month to month over the past year as companies react to rapid swings in President Trump’s trade policy. The deficit for the first two months of the year is 55% smaller than the same period in 2025, when firms were rushing to import goods ahead of expected new tariffs.
Nonmonetary Gold Exports Prop Up Headline Figures
The underlying details of the February report show that nonmonetary gold continues to distort headline trade figures. The Department of Commerce excludes these movements from GDP calculations because they often reflect speculative asset shifts, rather than final demand from consumers. In February, exports of nonmonetary gold jumped by $8.0 billion, reaching levels well above typical norms. While this propped up total exports, the metal's volatility is expected to pose minor challenges for tracking real economic activity in the first quarter.
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Tech-heavy Capital Goods Fuel Rebound in Goods Imports
The surge in February imports was heavily concentrated in core capital goods, suggesting a potential rebound in business equipment spending. Imports of goods rose $14.0 billion, led by a $7.8 billion increase in capital goods. Within this sector, computer imports surged $5.4 billion, while computer accessories and semiconductors grew by $1.5 billion and $1.1 billion, respectively.
Political Uncertainty Persists after Court Strikes Down Previous Tariffs
The trade outlook remains defined by shifting trade policies following the legal disputes over the Trump administration’s tariffs. Although previous "reciprocal" measures were struck down by the Supreme Court, a broad 10% global tariff remains in place, which the administration intends to increase to 15%. February's effective tariff rate, the average duty paid on all imports, held at approximately 9.3%, remaining below most projections, as firms continued to adjust import volumes and navigate the share of dutiable goods they brought in, which stayed below 50% during the month.
The trade deficit will likely widen over the course of the year as many companies start to replenish their inventories to keep up with consumer demand.
Source: Bureau of Economic Analysis
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