US Trade Deficit Surged To $140.5bn In March On Trump’s Tariff War

The United States’ international trade deficit in goods and services ballooned to $140.5 billion in March, marking a dramatic 14 per cent monthover-month rise and deepening concerns over the economy’s growing dependence on foreign imports.

The stark divergence between robust import growth and tepid export performance underscores futility of President Donald Trump’s raging tariff war with China and the rest of the world, and mounting structural imbalances that could weigh heavily on second-quarter GDP.

According to data released jointly by the US Census Bureau and the Bureau of Economic Analysis, March’s deficit represented a $17.3 billion increase from February’s revised figure of $123.2 billion.

Imports surged by $17.8 billion to a record $419.0 billion, outpacing the modest $0.5 billion rise in exports, which totaled $278.5 billion.

The resulting deficit is the largest monthly gap recorded since the onset of COVID-19. At the core of this trade chasm lies a $16.5 billion expansion in the goods deficit, reaching $163.5 billion, while the services surplus narrowed by $0.8 billion to $23.0 billion.

The year-to-date picture is even more stark: the cumulative trade gap for the first quarter swelled by a staggering $189.6 billion, or 92..6 per cent, compared to the same period in 2024.

Imports have risen 23.3 per cent year-overyear, while exports managed a modest 5.2 per cent gain. March’s import spike was fueled largely by a $22.5 billion jump in consumer goods, notably pharmaceutical preparations which alone rose by $20.9 billion.

Automotive imports—including vehicles, parts, and engines—also advanced, while capital goods grew by $3.7 bil – lion. Meanwhile, industrial supplies saw a countervailing decline of $10.7 billion, with notable contractions in finished metal shapes and nonmonetary gold.

On the export side, industrial supplies led the gains, climbing by $2.2 billion, buoyed by increased shipments of natural gas and nonmonetary gold. Automotive exports posted a $1.2 billion increase, largely from passenger car sales.

However, capital goods exports fell by $1.5 billion, dragged down by a sharp $1.8 billion decline in civilian aircraft exports. Service exports slipped by $0.9 billion to $95.2 billion, primarily due to a $1.3 billion contraction in travel services, despite minor gains in transport and financial services.

Service imports held relatively steady at $72..2 billion, with minor fluctuations across categories. Notably, the trade gap with Ireland nearly doubled to $29.3 billion due to a spike in pharmaceutical imports.

Meanwhile, deficits with China ($24.8B), Mexico ($16.8B), and the European Union ($48.3B) remain persistently wide. In inflation-adjusted terms, the real goods deficit increased 10.2 per cent to $150.9 billion.

Real imports jumped 5.8 per cent, while real exports edged up just 1.6 per cent. While some of the distortions may be transitory—such as delays in Canadian data reporting due to a new customs system—the underlying trajectory suggests a deepening reliance on foreign supply chains and a widening chasm between domestic consumption and production.