By Lucia Mutikani
WASHINGTON (Reuters) -The U.S. trade deficit widened to a record high in March as businesses boosted imports of goods ahead of President Donald Trump’s sweeping tariffs, which dragged gross domestic product into negative territory in the first quarter for the first time in three years.
The report from the Commerce Department on Tuesday showed the nation imported a record amount of goods from 10 countries, including Mexico and Vietnam. Imports from China were, however, the lowest in five years and could drop further as Trump has hiked duties on Chinese goods to a staggering 145%.
While reciprocal tariffs with most of the United States’ trade partners were suspended for 90 days, duties on Chinese goods came into effect in early April, triggering a trade war with Beijing.
“Businesses are clearly scrambling as they try to find a way through this time of unprecedented change, but the worst is undoubtedly yet to come because the import tariff collections did not start to roll in earnest until after the White House Liberation Day announcement on April 2,” said Christopher Rupkey, chief economist at FWDBONDS. “There are still no trade deals announced in Trump 2.0.”
The trade gap jumped 14.0%, or $17.3 billion, to a record $140.5 billion, the Commerce Department’s Bureau of Economic Analysis (BEA) said on Tuesday. Economists polled by Reuters had forecast the trade deficit rising to $137.0 billion.
Imports vaulted 4.4% to an all-time high $419.0 billion in March. Goods imports soared 5.4% to a record $346.8 billion. They were boosted by a $22.5 billion jump in consumer goods to an all-time high, mostly pharmaceutical preparations.
Capital goods imports increased $3.7 billion to a record high, reflecting a solid rise in computer accessories. Imports of automotive vehicles, parts and engines increased $2.6 billion, driven by passenger cars.
But imports of industrial supplies declined $10.7 billion amid decreases in finished metal shapes and nonmonetary gold, which had accounted for the surge in the prior two months. Crude oil imports fell $1.2 billion.
EXPORTS RISE MARGINALLY
Exports climbed 0.2% to $278.5 billion, also a record high. Exports of goods increased 0.7% to $183.2 billion, the highest since July 2022, lifted by industrial supplies and materials, which advanced $2.2 billion amid rises in natural gas and nonmonetary gold.
Automotive vehicles, parts and engines exports increased $1.2 billion. But exports of capital goods decreased $1.5 billion, weighed down by a $1.8 billion decline in shipments of civilian aircraft. The goods trade deficit ballooned 11.2% to a record $163.5 billion in March.
