US Trade Deficit Increases in December Due to Rising Imports

US Trade Deficit Widens Sharply in December

The US trade deficit widened sharply in December, with imports rising nearly 5% and exports increasing 6% last year. The Commerce Department reported that the trade deficit in goods increased by 2% to a record $1.24 trillion in 2025, despite US President Donald Trump’s tariffs on foreign-manufactured merchandise.

The second consecutive monthly decline in the trade deficit suggests that trade made little or no contribution to gross domestic product (GDP) in the fourth quarter. The US deficit in the goods trade with China decreased by nearly 32% to $202 billion in 2025, while the deficit with Taiwan increased by 44%. Imports from Vietnam also rose significantly.

The surge in imports of computer chips and other tech goods was driven by investments in artificial intelligence. Capital goods imports increased by $5.6 billion, lifted by computer accessories and telecommunications equipment. However, consumer goods imports fell due to tariffs on pharmaceutical preparations.

Exports fell 1.7% to $287.3 billion in December, but capital goods exports increased, boosted by semiconductors. The Bureau of Economic Analysis and the US Census Bureau reported that the trade gap ballooned by 32.6% to a five-month high of $70.3 billion. Economists polled by Reuters forecast the trade deficit would contract to $55.5 billion.

The report was delayed due to last year’s government shutdown. The Commerce Department attributed the increase in imports to “strong demand for industrial supplies and materials, including non-monetary gold, copper, and crude oil.”

Source: Al Jazeera