U.S. Trade Deficit Hits Record High in March Amid Tariff Concerns

Economy

U.S. Trade Deficit Hits Record High in March Amid Tariff Concerns

6 months ago

News sources:

REUTERS

CHANNELNEWSASIA

SCMP

NEWSWEEK

INDIATIMES 2

U.S. Trade Deficit Hits Record High in March Amid Tariff Concerns

Credited from: CHANNELNEWSASIA

The U.S. trade deficit surged to a record $140.5 billion in March, a 14% increase from February.
Businesses ramped up imports to avoid impending tariffs, particularly on Chinese goods.
This trade gap marked the largest deficit since 1992, negatively impacting GDP growth.

The U.S. trade deficit widened significantly in March, reaching an unprecedented $140.5 billion, as businesses increased imports in anticipation of forthcoming tariffs. This figure marks a 14% increase from the revised February deficit of $123.2 billion, according to the Commerce Department's Bureau of Economic Analysis (BEA) reports from Reuters, Channel News Asia, and South China Morning Post.

This record trade gap has implications for the U.S. economy, having contributed to an expected contraction in gross domestic product (GDP) of 0.3% annualized for the first quarter of the year. The trade deficit was responsible for cutting a record 4.83 percentage points from GDP, causing analysts to project a negative growth rate for the first time in three years according to Newsweek and India Times.

Economists suggest that while the flood of imports is likely to decrease by May, potentially allowing GDP to rebound, any benefits could be countered by a drop in exports as retaliatory measures from trading partners continue. This shift has already been reflected in decreased visitor numbers to the U.S., especially from Canada, amid protests against the tariffs according to Reuters and South China Morning Post.