Wyatte Grantham-Philips, AP Business Writer
NEW YORK (AP) — The US trade deficit surged to a record $140.5 billion in March as consumers and businesses tried to preempt President Donald Trump’s latest and most drastic tariffs.
The deficit – measuring the gap between the value of goods and services sold overseas versus what the US purchases – roughly doubled last year. In March 2024, Commerce Department records show that the gap is just under $68.6 billion.
Exports of U.S. goods and services totaled around $278.5 billion in March, while imports rose to around $419 billion, according to federal data released Tuesday. It has increased by $500 million and $17.8 billion from trade in February, respectively.
Consumer goods led to a surge in imports – an increase of $22.5 billion in March. Pharmaceutical products in particular have reached $20.9 billion, the U.S. Census Bureau and the Bureau of Economic Analysis point out, indicating that drugmakers were trying to advance Trump’s threat of slap tariffs in the sector.
“We knew about the consumer goods that accounted for the majority of the increase in March, but we found that drugs were $20 billion higher, almost all of which were imported from Ireland,” an analyst wrote in a research note on Tuesday. “Uncertainty remains high and we may see wider signs of front roads in the coming months.”
Imports of “capital goods” such as computers, as well as auto parts and automobiles also increased in March. However, industrial goods and materials such as metals and crude oil that have come into the United States have fallen due to the effects of tariffs on steel and aluminum, particularly on steel and aluminum, as well as other taxes that affect energy. Service-based imports like travel have also declined.
Overall, imports are flooded by the US for products that have been caught up in the intersection of an ongoing trade war, or for products that we fear will be present soon. Trump has threatened and imposed a series of sudden tariffs in recent months. Much of March in particular was filled with predictions and uncertainty leading up to what the president called “liberation day” on April 2nd. With the exception of China, it has been postponed since the tariff rates in many countries increased, but other drastic taxes remain.
The White House argues that new tariffs will help shut down long-standing trade deficits (the US has sold less other parts of the world than it was purchased since 1975). But economists are warning of serious consequences for businesses, households and economies around the world under the taxes proposed by Trump.
These new tariffs are already increasing the operating costs for businesses that rely on the global supply chain. This raises the prices of various products that consumers purchase daily.
The recent surge in imports reflects efforts by businesses across the country to bring in foreign goods before more jobs begin. For example, it jumped from 9.2% to $315.7 billion in March, Census Bureau data was released last month.
The trade deficit in March surpasses the last monthly record of $130.7 billion reported in January. It also won a jump of more than $32 billion since December amid uncertainty in tariffs after Trump took office.
All of this helped to reduce economic growth in the first three months of the year. Last week, the Commerce Department reported that US gross domestic product (products of goods and services) fell at an annual pace of 0.3% from January to March, marking its first decline in three years.
Imports rose at a total pace of 41% over that period, cutting 5% points from first quarter growth at the fastest rate since 2020. However, that surge is likely to reverse in the second quarter, removing GDP weight.
Original issue: May 6, 2025, 12:57pm EDT
