U.S. Trade Deficit Hits Record as Tariff Deadline Looms
In March, the U.S. trade deficit hit a record of $140.5 billion as businesses imported goods quickly to avoid impending tariffs, affecting GDP negatively. The import surge was attributed to President Trump’s tariffs, disrupting trade with China and causing first-quarter economic contraction for the first time since 2022.
The United States reported a historic trade deficit in March, reaching $140.5 billion, as businesses rushed to import goods before President Donald Trump's tariffs hit. This economic adjustment contributed to a dip in the gross domestic product for the first quarter, marking the first decline in three years according to the Commerce Department's Bureau of Economic Analysis.
The significant trade gap follows Trump's decision to increase tariffs, with particularly high duties on Chinese products, prompting companies to stockpile merchandise. While a temporary reprieve was granted for most trade partners, Chinese imports faced escalating tariffs starting in early April, commencing a trade conflict with Beijing.
As companies scrambled to import at lower costs, imports surged 4.4% to an unprecedented $419 billion, while exports modestly rose to $278.5 billion. Economists advise that the import wave may subside by May, which could aid GDP recovery, though export declines might counterbalance this due to international boycotts and reduced travel to the U.S.
(With inputs from agencies.)
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