US Trade Deficit Narrows Before New Tariffs
February Data Reveals Decrease in Trade Gap
According to the Commerce Department, the US trade deficit narrowed in February, just before President Donald Trump announced new global tariffs.
Trade Gap Decreases
- Trade gap fell by 6.1% to $122.7 billion
- Results slightly surpassed analysts’ expectations
Trump’s Tariffs
In February, Trump announced tariffs on Canada, Mexico, and China. Since then, he has imposed heavy levies on steel, aluminum, and autos, with a global 10% tariff set for early April.
Impact on US Trade
These tariffs are expected to significantly affect US trade as businesses adjust supply chains and try to mitigate rising costs. “Front-loading of imports remained in full effect in February,” noted Matthew Martin, senior US economist at Oxford Economics, referring to businesses stocking up ahead of tariff hikes.
Uncertainty Looms
Martin warned that businesses may struggle to adjust as the April 5 deadline for new tariffs approaches. This could lead to a sharp decline in imports during the second quarter, while retaliatory tariffs from other countries will likely weigh on US exports.
February Trade Details
- Trade deficit shrank as exports rose and imports stayed nearly the same
- Exports increased by $8.0 billion to $278.5 billion
- Imports decreased slightly to $401.1 billion
