A lot of the reason for a lower goods and services deficit is thanks to a 5.5% rise in exports versus the 0.7% decline in imports in January. Some of our biggest export gains, however, were in precious metals like gold and silver. Gold exports were up $4.6 billion to $10.4 billion in January with precious metals rising $4.1 billion to $6.2 billion exported in January.
Export values rose $14.7 billion from December, of which $8.7 billion can be attributed to gold and precious metals.
For manufactured goods, we can see that the demand for computer hardware used for AI data centers continues to be a new leading source of the deficit. U.S. importers spent $3.9 billion more on computers in January than December, with imports valued at $28.3 billion. However, exports of computers also rose significantly, increasing by $2.6 billion to $7.6 billion, partially offsetting the surge. Telecommunications equipment such as wireless routers rose $1.3 billion over December imports to $12.7 billion in January. Those two items were the only two to see large import gains month over month.
The usual items on the import leaderboard – automotive and pharmaceuticals – saw notable declines. Trucks and passenger cars saw a $1.4 billion and $1.02 billion drop in imports, respectively. Pharmaceutical imports fell $3.4 billion month-over-month to $12.5 billion. The U.S. spent $3.1 billion on imported trucks in January and $12.8 billion on imported cars.
The increased demand in data center construction suggests these trade numbers are skewed by single-industry demand. We have seen a moderation in imports for cars, trucks and auto parts, which is likely due to the Section 232 tariffs.
As a sidebar example of tariff impacts on trade, U.S. Forged Rings, producers of steel piping, cylinders and other industrial components, said recently it will build a major production facility in North Carolina, next to its partner Nucor. The project is part of a broader three-phase development valued at $875 million with the first two phases expected to create 625 jobs. Switzerland-based multinational pharmaceuticals giant Novartis is building its fifth U.S. lab in Texas, after breaking ground on four labs here over 10 months.
“The monthly trade deficit of $54 billion is one of the smallest we’ve seen in years,” said CPA’s chief economist emeritus Jeff Ferry.
“Tariffs are flattening the growth of goods imports, but against that the massive spend on data centers led to January computer imports up 100% (on a year-on-year basis) and telecom equipment up over 50%. Still, more action needs to be taken to drive down the trade deficit and drive up U.S. production,” Ferry said.
AI Data Centers Help Drive January Goods Deficit of $81.7 Billion
The overall goods and services deficit number for January looked pretty good – coming in at $54.4 billion, its lowest monthly point in years. But when services are stripped from the equation, the goods trade looks like it has returned to level footing. January’s goods deficit was $81.7 billion, according to Thursday’s trade data from the Bureau of Economic Analysis.
This $81.7 billion figure is lower than nearly every month, save for two in 2025, and lower than every monthly deficit in 2024. Instead, it looks more like 2022 and 2023 numbers at the moment when monthly deficits usually hovered between a low of $70 billion and a high of $80 billion range.
Again, the overall goods and services deficit for January was $54.4 billion. The three month rolling average for both goods and services is $61.1 billion, meaning we are now plowing deeper into the trade deficit compared to the three month averages over the last four months. The overall deficit is rising, not falling.
One of the main reasons for the lower overall deficit in January was Wall Street. Per usual, financial services are the number one American services export. January saw inflows of $19.2 billion, about $2 billion higher than last year’s monthly averages. Financial services imports are from foreigners paying things like broker and asset management fees, along with custody services of U.S. securities.
Services exports are no match for the goods deficit. Services barely make a dent in our overall deficit, and are led by three industries, two of which are mostly fee collectors – financial services and IP for computer software (such as a license to use Adobe Acrobat in a German office, for example).
January Imports: What’s Driving the Deficit?
A lot of the reason for a lower goods and services deficit is thanks to a 5.5% rise in exports versus the 0.7% decline in imports in January. Some of our biggest export gains, however, were in precious metals like gold and silver. Gold exports were up $4.6 billion to $10.4 billion in January with precious metals rising $4.1 billion to $6.2 billion exported in January.
Export values rose $14.7 billion from December, of which $8.7 billion can be attributed to gold and precious metals.
For manufactured goods, we can see that the demand for computer hardware used for AI data centers continues to be a new leading source of the deficit. U.S. importers spent $3.9 billion more on computers in January than December, with imports valued at $28.3 billion. However, exports of computers also rose significantly, increasing by $2.6 billion to $7.6 billion, partially offsetting the surge. Telecommunications equipment such as wireless routers rose $1.3 billion over December imports to $12.7 billion in January. Those two items were the only two to see large import gains month over month.
The usual items on the import leaderboard – automotive and pharmaceuticals – saw notable declines. Trucks and passenger cars saw a $1.4 billion and $1.02 billion drop in imports, respectively. Pharmaceutical imports fell $3.4 billion month-over-month to $12.5 billion. The U.S. spent $3.1 billion on imported trucks in January and $12.8 billion on imported cars.
The increased demand in data center construction suggests these trade numbers are skewed by single-industry demand. We have seen a moderation in imports for cars, trucks and auto parts, which is likely due to the Section 232 tariffs.
As a sidebar example of tariff impacts on trade, U.S. Forged Rings, producers of steel piping, cylinders and other industrial components, said recently it will build a major production facility in North Carolina, next to its partner Nucor. The project is part of a broader three-phase development valued at $875 million with the first two phases expected to create 625 jobs. Switzerland-based multinational pharmaceuticals giant Novartis is building its fifth U.S. lab in Texas, after breaking ground on four labs here over 10 months.
“The monthly trade deficit of $54 billion is one of the smallest we’ve seen in years,” said CPA’s chief economist emeritus Jeff Ferry.
“Tariffs are flattening the growth of goods imports, but against that the massive spend on data centers led to January computer imports up 100% (on a year-on-year basis) and telecom equipment up over 50%. Still, more action needs to be taken to drive down the trade deficit and drive up U.S. production,” Ferry said.
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