US records record trade deficit of $140.5 billion in March, preceding Trump tariffs

The United States recorded its highest trade deficit in March, with the total shortfall expanding by 14.0 percent to $140.5 billion, according to the latest government data released on Tuesday.

This marks the largest trade deficit since 1992, reflecting a $17.3 billion increase from February’s revised figure of $123.2 billion. The Commerce Department's report highlights a surge in business activity as companies pulled forward industrial supplies and retailers stocked up on consumer goods ahead of anticipated tariffs.

This spike in the trade gap occurred prior to President Donald Trump’s implementation of substantial tariffs on Chinese imports, alongside lower baseline duties of 10 percent on goods from most countries. The administration later raised tariffs on numerous nations, though these were suspended until July to allow for renegotiation of trade agreements.

March’s trade deficit exceeded analysts' expectations, with forecasts from Dow Jones Newswires and The Wall Street Journal predicting a shortfall of $137.6 billion.

The trade imbalance was driven by a 4.4 percent increase in imports, which rose to $419.0 billion as consumers hurried to make purchases in anticipation of the tariffs. Consumer goods saw the most significant rise, with imports increasing by $22.5 billion. Exports grew slightly by 0.2 percent to $278.5 billion.

Wells Fargo economists noted that while April may see a final surge of firms rushing to beat the tariffs, the outlook for net exports suggests a dramatic reversal in the months to come. "April may bring a last ditch effort of firms front running tariffs, but after that net exports are set to reverse dramatically," he said.