The U.S. trade deficit surged to a record high in March as businesses increased imports of goods ahead of expected tariffs. This contributed to the gross domestic product (GDP) declining into negative territory during the first quarter for the first time in three years. The trade gap rose by 14.0% to a record $140.5 billion from $123.2 billion in February, according to the Commerce Department’s Bureau of Economic Analysis (BEA). Economists had anticipated the trade deficit to rise to $137.0 billion. President Donald Trump’s tariffs, including a significant increase on Chinese imports, prompted businesses to accelerate imports to avoid higher costs. Imports reached an all-time high of $419.0 billion in March, with goods imports climbing to a record $346.8 billion. Exports also hit a record high of $278.5 billion. The trade deficit cut a record 4.83 percentage points from GDP last quarter, causing the economy to contract at a 0.3% annualized rate. Economists expect imports to stabilize by May, potentially aiding GDP recovery in the second quarter. However, they warn that any boost from reduced imports might be offset by a decline in exports due to international boycotts of American goods and travel. There has been a noticeable decrease in visitors to the U.S., particularly from Canada, protesting the tariffs and immigration policies.
— new from Reuters
