It’s a straight line up. The goods and services deficit kicked off January by rising a record 34% over December. Importers are front running tariffs and getting in their orders before everything changes, likely at some point after April 1.
January imports rose 10% to $401.2 billion while exports rose at their usual pace, around 1% to $269.8 billion, according to the Bureau of Economic Analysis (BEA). These figures show that when push comes to shove, the U.S. is an import economy. You will never get export numbers that swell like this in any given month.
Year‐over‐year, the goods and services deficit increased $64.5 billion, or 96.5% more than was reported in January 2024.
Obviously, the goods trade is even uglier. The goods gap was $155.57 billion in January versus around $90 billion in both January 2024 and January 2023. When you take petroleum values away, the total deficit was $159.82 billion. The January goods deficit is the biggest in years, if not ever.
Top 10 Deficit Trading Partners
Deficits were recorded, in billions of dollars, with China ($29.7), the European Union ($25.5), Switzerland ($22.8), Mexico ($15.5), Ireland ($12.4), Vietnam ($11.9), Canada ($11.3), Germany ($7.6), Taiwan ($7.5) and Japan ($7.4).
The China monthly deficit is the biggest since 2022, when it hit $36.26 billion.
The monthly goods deficit with the EU, Switzerland (probably gold imports), Canada and Ireland were the biggest ever recorded in a single month. All others in the top 10, including Mexico, did not surpass previous import records.
Products with Biggest Deficits
In light of the threat of tariffs upending years of the USMCA’s singular auto market, the trade balance with Canada for passenger cars, commercial trucks and buses and auto parts looks good for January. The U.S. exported $4.29 billion worth of automotive goods to Canada and imported $4.63 billion.
Mexico is another story. The U.S. exported $3.25 billion worth of cars, car parts and commercial vehicles and imported $13.32 billion. That is all due to Mexico’s labor arbitrage advantages. For passenger vehicles, the U.S. shipped $208 million worth of cars south of the border while importing $3.58 billion worth.
Other big deficits include:
Products
January exports
January imports
Deficit
Advanced technologies
$39.70 billion
$74.69 billion
-$34.99 billion
Finished metal shapes
$7.28 billion
$34.23 billion
-$26.95 billion
Passenger cars
$3.75 billion
$17.57 billion
-$13.82 billion
Auto parts & accessories
$5.04 billion
$11.41 billion
-$6.37 billion
Agricultural commodities
$14.41 billion
$20.47 billion
-$6.06 billion
Crude oil
$9.18 billion
$13.98 billion
-$4.8 billion
These are just some examples. It is unclear what BEA means by finished metal shapes, but this import surge could be due to global tariffs on steel and aluminum products like steel pipe and rebar.
Advanced technologies are interesting because we tend to view the U.S. as an advanced tech innovator and power, but with the exception of aerospace (satellites) and weapons systems, the U.S. is a net importer of high tech goods, including the big network boxes used at data centers.
“Importers are all working hard to get ahead of tariffs that are likely to come into effect in April and later months,” said CPA Chief Economist Emeritus Jeff Ferry. “There is an open question as to when and how much the tariffs will reduce America’s $3.1 trillion annual rate of imports, and also what impact the tariffs will have on U.S. exports.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
Importers Front-Run Global Tariffs; Deficit Expands a Record Breaking 34% in January
It’s a straight line up. The goods and services deficit kicked off January by rising a record 34% over December. Importers are front running tariffs and getting in their orders before everything changes, likely at some point after April 1.
January imports rose 10% to $401.2 billion while exports rose at their usual pace, around 1% to $269.8 billion, according to the Bureau of Economic Analysis (BEA). These figures show that when push comes to shove, the U.S. is an import economy. You will never get export numbers that swell like this in any given month.
Year‐over‐year, the goods and services deficit increased $64.5 billion, or 96.5% more than was reported in January 2024.
Obviously, the goods trade is even uglier. The goods gap was $155.57 billion in January versus around $90 billion in both January 2024 and January 2023. When you take petroleum values away, the total deficit was $159.82 billion. The January goods deficit is the biggest in years, if not ever.
Top 10 Deficit Trading Partners
Deficits were recorded, in billions of dollars, with China ($29.7), the European Union ($25.5), Switzerland ($22.8), Mexico ($15.5), Ireland ($12.4), Vietnam ($11.9), Canada ($11.3), Germany ($7.6), Taiwan ($7.5) and Japan ($7.4).
The China monthly deficit is the biggest since 2022, when it hit $36.26 billion.
The monthly goods deficit with the EU, Switzerland (probably gold imports), Canada and Ireland were the biggest ever recorded in a single month. All others in the top 10, including Mexico, did not surpass previous import records.
Products with Biggest Deficits
In light of the threat of tariffs upending years of the USMCA’s singular auto market, the trade balance with Canada for passenger cars, commercial trucks and buses and auto parts looks good for January. The U.S. exported $4.29 billion worth of automotive goods to Canada and imported $4.63 billion.
Mexico is another story. The U.S. exported $3.25 billion worth of cars, car parts and commercial vehicles and imported $13.32 billion. That is all due to Mexico’s labor arbitrage advantages. For passenger vehicles, the U.S. shipped $208 million worth of cars south of the border while importing $3.58 billion worth.
Other big deficits include:
Products
January exports
January imports
Deficit
Advanced technologies
$39.70 billion
$74.69 billion
-$34.99 billion
Finished metal shapes
$7.28 billion
$34.23 billion
-$26.95 billion
Passenger cars
$3.75 billion
$17.57 billion
-$13.82 billion
Auto parts & accessories
$5.04 billion
$11.41 billion
-$6.37 billion
Agricultural commodities
$14.41 billion
$20.47 billion
-$6.06 billion
Crude oil
$9.18 billion
$13.98 billion
-$4.8 billion
These are just some examples. It is unclear what BEA means by finished metal shapes, but this import surge could be due to global tariffs on steel and aluminum products like steel pipe and rebar.
Advanced technologies are interesting because we tend to view the U.S. as an advanced tech innovator and power, but with the exception of aerospace (satellites) and weapons systems, the U.S. is a net importer of high tech goods, including the big network boxes used at data centers.
“Importers are all working hard to get ahead of tariffs that are likely to come into effect in April and later months,” said CPA Chief Economist Emeritus Jeff Ferry. “There is an open question as to when and how much the tariffs will reduce America’s $3.1 trillion annual rate of imports, and also what impact the tariffs will have on U.S. exports.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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