Tariff fallout: Overall US trade deficit shrinks, gap with emerging partners increases
&imwidth=600&imheight=450&format=webp&quality=medium "Tariff fallout: Overall US trade deficit shrinks, gap with emerging partners increases")
The US trade deficit was more than USD 150 billion during the January-March 2025 period before the tariffs took effect. Photograph: (AFP representational)
US tariff fallout: The US trade deficit was more than USD 150 billion during the January-March 2025 period before the tariffs took effect.
The State Bank of India (SBI) said in a report that after imposing tariffs, the United States' trade deficit declined by $42 billion. However, the country's trade deficit with its top five trading partners, including India, has gone up by $9 billion.
The report further stated that the country's trade with its top partnersrose to USD 257 billion during April-July 2025 from USD 248 billion recorded in January-March 2025. However, despite the increase in trade volume, the trade deficit of the nation declined during the same period.
"During the post-tariff period, US trade deficit declined by USD 42 billion...but if we look at the trade deficit of the US with the top 5 trading partners (+ India), it has increased by USD 9 billion to USD 257 bn," the analysisnoted.
US trade deficit
The US trade deficit was more than USD 150 billion during the January-March 2025 periodbefore the tariffs took effect. It has now declined to less thanUSD 100 billion per month.
The tariffs imposed by the country were successful in controlling the US deficit. The US managed to reduce its trade deficit with China and Switzerland. However, its trade deficit increased withVietnam, Mexico, Taiwan, and India.
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The US trade deficit with China declined from USD 71 billion to USD 58 billion, and with Switzerland from USD 54 billion to USD 1 billion. Itsdeficit with Vietnam rose from USD 36 billion to USD 61 billion, with Mexico from USD 47 billion to USD 65 billion, with Taiwan from USD 22 billion to USD 48 billion, and with India from USD 17 billion to USD 23 billion.
In July 2025, Mexico accounted for 16 per cent of the total trade of the United States, followed by Canada at 12.5 per cent.
India was ranked 10th with a 2.7 per cent share.
The report also noted that the trade deficit is shifting from traditional partners like China and Switzerland towards trade partners likeVietnam, Mexico, Taiwan, and India.