In March 2025, the U.S. trade deficit fell to an unprecedented ($162 billion), a 10% jump from the previous month. This alarming surge was primarily fueled by a significant increase in imports, particularly industrial supplies, which saw their most substantial increase since 1993, rising by almost 5%. While imports surged, exports declined, further widening the trade deficit. As a result, the first quarter GDP for the U.S. came fell –0.3% quarter-over-quarter.
This news, along with declines in retail and wholesale inventories, paints a concerning picture for the overall economy. The record trade deficit raises important questions about the future of the U.S. economy and the effectiveness of protectionist trade policies.
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