• The US goods trade deficit soared to a record $1.24 trillion in 2025.
• In December alone, the trade deficit increased to $70.3 billion, up 32.6% from November.
• Imports rose sharply, with significant increases in capital goods and industrial supplies.
• Trade deficits were notably large with Taiwan, Vietnam, Mexico, and China.
• Global trade dynamics are shifting, with a move towards sourcing from Southeast Asia.

The US trade deficit in goods escalated to a record level of $1.24 trillion in 2025, reflecting persistent import strength even amidst the tariffs imposed during President Donald Trump's first year back in office. The overall trade deficit for goods and services combined stood at $901.5 billion, slightly lower than the previous year, according to data released by the Commerce Department and reported by India Times and Reuters.

In December 2025, the US trade deficit swelled 32.6% to $70.3 billion, exceeding economists' expectations for a $55.5 billion deficit. Exports for the month fell to $287.3 billion, while imports rose sharply to $357.6 billion due to increased demand for capital goods and industrial supplies, as highlighted by AA and South China Morning Post.

The trade dynamics reveal significant deficits with key partners, notably Taiwan ($19.8 billion), Vietnam ($17.6 billion), Mexico ($14.5 billion), and China ($12.4 billion). The persistent trade gap with China, though narrower than in previous years, remains concerning as companies shift their sourcing strategies due to tariffs, as stated in reports by Le Monde and Reuters.

Despite Trump's claims of a successful tariff strategy leading to a decreased trade deficit, the significant increase in the goods trade deficit raises questions about the effectiveness of these measures. While the overall trade deficit with China has slightly decreased, the US continues to trade deficits with other Asian economies as it alters its supply chain, according to research and analysis from AA and South China Morning Post.