WASHINGTON, April 2 - The U.S. trade deficit grew in February as a rise in imports outweighed a significant increase in exports, which hit a record high. This could keep trade from contributing positively to economi...
WASHINGTON, April 2 - The U.S. trade deficit grew in February as a rise in imports outweighed a significant increase in exports, which hit a record high. This could keep trade from contributing positively to economic growth in the first quarter.
The trade gap widened by 4.9%, reaching $57.3 billion, according to the Commerce Department's Bureau of Economic Analysis and the Census Bureau. The January data was adjusted to show a smaller deficit of $54.7 billion, rather than the previously estimated $54.5 billion. Economists surveyed by Reuters had predicted a trade deficit of $61.0 billion in February.
These government agencies are still catching up on data releases after last year's shutdown, leading to ongoing fluctuations in trade data as policies shift.
In February, the U.S. Supreme Court invalidated President Donald Trump's broad tariffs, which were initiated under a law meant for national emergencies. In response, Trump imposed a global tariff for up to 150 days.
Trump has argued that the tariffs are essential to tackle the trade deficit and boost American manufacturing, despite the fact that the U.S. has lost 100,000 factory jobs since January 2025.
Economists predict that the conflict involving the U.S. and Israel against Iran, which has led to shipping restrictions in the Strait of Hormuz affecting various goods, will result in lower trade volumes.
Imports rose 4.3% to $372.1 billion in February, with goods imports increasing by 5.0% to $291.5 billion. This rise was largely influenced by an increase in capital goods imports, which saw a boost of $7.8 billion, mainly in computers, accessories, and semiconductors. These imports are likely connected to advancements in artificial intelligence and the construction of data centers.
Additionally, industrial supplies and materials imports grew by $3.1 billion, primarily driven by crude oil. Consumer goods imports increased by $2.2 billion, with pharmaceutical preparations accounting for a $1.0 billion rise. Automotive vehicle, parts, and engine imports rose by $1.6 billion.
Exports surged by 4.2% to an all-time high of $314.8 billion, with goods exports climbing 5.9% to a record of $206.9 billion.
Exports of industrial supplies and materials increased by $10.2 billion to also reach a record high, propelled by monetary gold and natural gas. Non-petroleum goods exports were at their highest levels ever recorded.
The goods trade deficit grew by 3.0% to $84.6 billion in February. When adjusted for inflation, the goods deficit rose by $0.5 billion, or 0.6%, to $83.5 billion.
Trade negatively impacted gross domestic product growth in the fourth quarter. The Atlanta Federal Reserve predicts GDP will increase at a 1.9% annualized rate in the first quarter, after a growth rate of 0.7% in the fourth quarter.
The goods trade deficit with China grew to $13.1 billion in February from $12.5 billion in January, while the deficit with Mexico increased by $4.1 billion to $16.8 billion.
Service exports rose by $1.1 billion to a record $107.9 billion, spurred by increases in travel, business services, financial services, and intellectual property usage fees. However, transport service exports dropped.
Service imports climbed by $1.3 billion to a record high of $80.6 billion, driven by costs associated with intellectual property.