Amid tariff wars, the US trade deficit soared to a record 140.5 billion dollars in march, its highest monthly gap on record. The deficit was fuelled by a historic spike in imports ahead of sweeping tariffs announced by Donald Trump.  

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According to the commerce department data, imports rose 4.4 per cent to an all-time high, while exports remained nearly flat. The biggest driver: A jump in consumer goods, led by pharmaceutical imports, most of which came from Ireland.  

The surge reflects businesses rushing to stockpile goods before tariffs kicked in on April 2, dubbed “liberation day” by the white house.

Economic impact & tariff fallout

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The trade imbalance had real consequences. The US economy contracted 0.3 per cent in the first quarter, marking the first decline in three years. Imports grew at their fastest pace since 2020—up 41 per cent over the quarter—cutting 5 percentage points from GDP growth.  

Imports of capital goods rose $3.7 billion, driven by demand for computer accessories. Auto imports climbed $2.6 billion, while industrial supply imports fell $10.7 billion, due to lower shipments of gold and silver.  

Economists warn that the front-loading of imports may reverse in the coming months, potentially shifting pressure back onto domestic production and prices.

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Meanwhile, the US dollar has weakened against key global currencies since the start of 2025. From December through march, 92.5 billion dollars in US savings moved into offshore gold and silver, signalling growing concern over economic policy.  

Imports from China fell to their lowest level in five years, impacted by a 145 per cent tariff that took effect in April. With no new trade deals announced and reciprocal tariffs from key partners on hold for just 90 days, economists warn that the worst effects of the trade war may still be ahead.

(With inputs from the agencies)