The US trade deficit in goods reached a historic high of $162 billion in March 2025, completely blowing past the $92.8 billion recorded in the same month last year.
This data was reported by the US Census Bureau, and it is the biggest monthly trade gap since the government started tracking these numbers back in the early 1990s.
The spike came just before Trump’s new tariffs hit. Businesses across the country rushed to buy goods—especially stuff that doesn’t rot fast, like cars, industrial parts, and consumer goods—so they wouldn’t get slammed by price hikes.
That panic-buying binge caused imports to skyrocket while exports stayed mostly flat. And now, the result is a trade gap wider than anyone’s seen in over three decades.
Trump’s April tariffs fueled the surge in imports
On April 2, President Donald Trump announced what he called “reciprocal tariffs,” aiming to punish countries he claims are taking advantage of the US.
Right after the announcement, stocks took a nosedive, and the cost of financing the US government’s debt went up as markets reacted to fears of a coming recession and a hit to global trade.
Two days later, on April 4, the administration decided to hold off on most of the new tariffs for 90 days, but that didn’t help much. A 10% base tariff remained, along with a massive 145% tariff on most Chinese goods. Economists now say the effective tariff rate is the highest it’s been in over a hundred years.
Oliver Allen, a senior economist at Pantheon Macroeconomics, said the spike in imports was clearly a response to Trump’s tariff threats. “The picture for [the first quarter of 2025] overall remains that President Trump’s tariff threats set off a rush to buy goods now rather than face higher prices later, prompting a startling surge in imports,” Allen said.
This flood of imports hit just as the first-quarter GDP numbers are about to drop. Analysts at Reuters expect the report—set to be released Wednesday—to show only 0.3% growth, way down from the 2.4% logged in the last quarter of 2024. However, some economists are saying the GDP number might be misleading.
Economists warn that GDP data will be distorted
Isabelle Mateos y Lago, chief economist at BNP Paribas, said the GDP number won’t tell the full story. “It’s going to be full of noise and reflecting, to a very large extent, the sum of imports,” Isabelle said. “You’re going to need to look really under the hood to see what’s really happening.”
Others like James Knightley, chief international economist at ING Bank, are already preparing for bad headlines. “Today’s [trade] numbers do really highlight the risk that it may well be a negative GDP print, and that is obviously setting us up for a very weak 2025,” James said.
He explained that businesses were just stacking goods to beat the tariffs, and now that rush is over. “We expect this to unwind pretty soon: ports data is already slowing.”
That slowdown is showing up at West Coast ports. Los Angeles is reporting less cargo traffic in recent weeks. Some ships carrying products from China’s east coast are even turning around.
On top of that, there are already whispers about shortages in construction and industrial goods from China, all tied to the tariff chaos.
While the trade gap and tariffs dominate the headlines, there’s another money story brewing under Trump’s watch that’s pissing off Democrats in Congress.
Senator Patty Murray from Washington and Representative Rosa DeLauro from Connecticut said on Tuesday that the Trump administration is freezing money that Congress already signed off on. That number sits at $436.87 billion, money that’s supposed to be used across nearly every major federal agency.
Almost $42 billion meant for the State Department is either frozen or canceled. That includes USAID funding, which is now stuck. Over $62 billion in grants for the Transportation Department isn’t going anywhere either.
Then there’s $943 million frozen for the Head Start early-education program and more than $10 billion held back from the Natural Resources Conservation Service. Democrats are calling the decision reckless, saying it’s messing with essential services and programs while the economy is already looking shaky.
Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
