US Goods Trade Deficit Hits Record $1.24 Trillion in 2025
The United States recorded a historic high goods trade deficit in 2025, according to data released by the Commerce Department. The shortfall in goods totaled $1.24 trillion for the year, slightly higher than the level reported in 2024.
Overall Trade Gap Narrows Slightly
When combining goods and services, the total US trade deficit narrowed marginally to $901.5 billion in 2025, compared with $903.5 billion the previous year. Despite the record goods gap, the broader trade picture showed modest improvement.
December Deficit Jumps Sharply
In December alone, the overall trade deficit widened by 32.6 percent to $70.3 billion, exceeding expectations. The increase was driven by declining exports and rising imports during the month.
Shifts in Export and Import Categories
Exports of industrial supplies, including nonmonetary gold, declined in December, while imports in the same category increased. Purchases of capital goods such as computer accessories and telecommunications equipment also rose, contributing to the higher monthly deficit.
Impact of Tariff Policies
Trade patterns in 2025 were strongly influenced by tariff measures introduced by President Donald Trump after returning to office. The administration imposed new duties on goods from nearly all major trading partners in an effort to shrink the trade imbalance. As a result, the average effective tariff rate climbed to its highest level since the 1930s.
Trade Relations with China
Although the overall goods deficit expanded, the trade gap with China narrowed over the full year. This shift followed a period of reciprocal tariff increases between Washington and Beijing, though tensions between the two countries have eased since then.
