U.S. Trade Deficit Reaches Record $140.5 Billion in March 2025 Amid Pre-Tariff Import Surge; Chinese Imports Decline

The U.S. trade deficit reached a record $140.5 billion in March 2025, driven by a surge in imports as businesses stockpiled goods before new tariffs by President Trump. Imports rose 4.4% to $419 billion, while exports increased 0.2% to $278.5 billion. Imports from China fell to a five-year low due to 145% tariffs, while imports from other countries like Ireland and Vietnam increased. The data, released by the Commerce Department, highlights shifts in trade flows as companies adjust to the new tariff landscape.

Record Trade Gap Fueled by Pre-Tariff Import Rush

According to the U.S. Bureau of Economic Analysis (BEA), the March trade deficit rose by $17.3 billion, or 14%, from February’s revised figure of $123.2 billion. Imports surged 4.4% to a record $419.0 billion, while exports edged up just 0.2% to $278.5 billion. The goods deficit alone ballooned to $163.5 billion, also a record.

The spike in imports was largely attributed to a rush by businesses to bring in goods before the implementation of new tariffs. President Trump’s “Liberation Day” announcement on April 2 introduced sweeping import taxes on nearly all U.S. trading partners, with a 90-day grace period for most countries. However, tariffs on Chinese goods took effect immediately, prompting a sharp drop in trade with Beijing.

“Businesses pulled forward needed industrial supplies and retailers stocked their shelves with consumer goods in March ahead of tariffs,” economists at Wells Fargo noted in a client report.

Consumer Goods and Pharmaceuticals Lead Import Surge

Consumer goods imports led the March surge, increasing by $22.5 billion, with pharmaceutical products alone accounting for $20.9 billion of that rise. The pharmaceutical sector, in particular, saw a wave of stockpiling amid fears that it would be targeted in the next round of tariffs. President Trump has hinted at duties on pharmaceutical imports, and the White House has directed the Commerce Department to evaluate the sector.

Other categories that saw notable increases included apparel, furniture, jewelry, household appliances, and textiles. Capital goods imports rose by $3.7 billion, driven by computer accessories, while automotive imports increased by $2.6 billion, largely due to passenger cars.

In contrast, imports of industrial supplies fell by $10.7 billion, including a $10.3 billion drop in finished metal shapes and a $1.8 billion decline in non-monetary gold. Crude oil imports also declined by $1.2 billion.

Imports from China Plunge Amid Escalating Trade War

While overall imports surged, those from China fell to their lowest level since March 2020, when the COVID-19 pandemic disrupted global trade. The U.S. goods trade deficit with China narrowed to $24.8 billion in March from $26.6 billion in February.

The sharp decline follows the imposition of 145% tariffs on Chinese goods, which took effect in early April. China retaliated with 125% tariffs on U.S. exports, effectively freezing bilateral trade. The tit-for-tat measures have led to a collapse in cargo volumes between the two countries and a reallocation of supply chains.

According to a report by the Centre for Economic Policy Research, U.S. imports from China have fallen by approximately 90% under the current tariff regime. Imports from other Asian economies such as Vietnam and India, as well as European countries like Ireland and Germany, have increased as companies seek alternative sourcing.

Record Imports from Multiple Countries

March saw record-high imports from ten countries, including Mexico, Vietnam, Ireland, the United Kingdom, the Netherlands, Belgium, France, Germany, Italy, and India. Imports from Ireland alone jumped by $15.5 billion, largely due to pharmaceutical shipments, pushing the U.S. trade deficit with Ireland to $29.3 billion.

The trade deficit with France rose by $2.4 billion to $3.9 billion, while the deficit with Switzerland decreased by $4.1 billion due to a drop in imports. The trade gap with Canada narrowed to $4.9 billion from $7.4 billion in February, and the surplus with the United Kingdom also declined.

Business Response and Economic Implications

The surge in imports reflects a widespread effort by U.S. businesses to front-run the tariffs. Retailers, manufacturers, and pharmaceutical firms accelerated orders to avoid higher costs later in the year. Some companies, such as Ford, have already warned of significant impacts from the tariffs and have pulled forward guidance.

Meanwhile, some retailers have halted sales to U.S. customers due to the end of tariff exemptions for small parcels. Others, like Temu, have shifted away from Chinese imports entirely to avoid the steep duties.

Despite the import surge, exports rose only modestly. Goods exports increased by 0.7% to $183.2 billion, led by industrial supplies and materials, including natural gas and non-monetary gold. Automotive exports also rose by $1.2 billion. However, capital goods exports fell by $1.5 billion, weighed down by a $1.8 billion drop in civilian aircraft shipments.

Exports of services declined by $0.9 billion to $95.2 billion, driven by a $1.3 billion drop in travel-related services, as international visitors to the U.S. decreased in response to the tariffs and immigration policies.

Trade Deficit Nearly Doubles Year-Over-Year

Year-to-date, the U.S. trade deficit has increased by 92.6% compared to the same period in 2024. Imports have risen by 23.3%, or $230.7 billion, while exports have grown by just 5.2%, or $41.1 billion.

The March deficit surpassed the previous record of $130.7 billion set in January, which also occurred amid tariff-related uncertainty. The average goods and services deficit for the three months ending in March rose to $131.4 billion, up $14.1 billion from the prior period.

References

• U.S. International Trade in Goods and Services, March 2025 | U.S. Bureau of Economic Analysis (BEA)
• US trade deficit hits record high ahead of Trump tariffs
• U.S. trade deficit jumps to record high on pre-tariff import rush
• US Trade Deficit Hit Fresh Record Before New Trump Tariffs
• Roaring tariffs: The global impact of the 2025 US trade war
• Trump tariffs live updates: Trump meets with Canada's Carney, hints at coming pharma tariffs