U.S. goods trade deficit hits record $1.24 trillion despite Trump’s tariff push

President Donald Trump’s tariff policies in 2025 produced a mixed economic picture — narrowing the overall trade deficit only modestly while the goods trade deficit hit a record high and import taxes increased costs for U.S. businesses.

The overall U.S. trade deficit edged down to just over $901 billion from $904 billion in 2024, the Commerce Department reported, making it the third-highest on record. Exports rose 6% and imports climbed nearly 5%. 

But the goods trade deficit — the main focus of Trump’s protectionist policies — widened 2% to a record $1.24 trillion, driven in part by increased imports of computer chips and other tech goods from Taiwan to support investments in artificial intelligence.

The goods deficit with China plunged nearly 32% to $202 billion, though trade shifted toward other countries. The goods gap with Taiwan doubled to $147 billion, and the deficit with Vietnam jumped 44% to $178 billion.

Research from the JPMorganChase Institute found that tariffs paid by midsized U.S. firms tripled last year. 

Those companies employ about 48 million workers and have responded by raising prices, reducing hiring, or accepting lower profits.

A Federal Reserve Bank of New York study found U.S. businesses and consumers are paying nearly 90% of the tariff costs — a conclusion White House economic adviser Kevin Hassett called “an embarrassment,” saying the economists involved “should presumably be disciplined.” Similar conclusions have been reached by researchers at Harvard, the University of Chicago, the Kiel Institut and the Congressional Budget Office.