In December, US imports soared to a record high as businesses rushed to secure foreign goods in response to President Donald Trump's tariff threats. The Commerce Department reported that imports surged by 4% to $293.1 billion, the highest since tracking began in 1992.
This spike contributed to the largest trade deficit in nearly two years, amid ongoing uncertainty over global trade due to Trump's tariff proposals. While a 10% tariff on Chinese goods was implemented, tariffs on shipments from Canada and Mexico were postponed for a month.
Trump aims to encourage domestic production through tariffs but concerns linger about their impact on the US economy. Trade tensions have also sparked retaliatory measures, with China imposing tariffs on US goods and investigating Google for anti-monopoly practices.
The tariffs, including the end of duty-free treatment on parcels under $800, are expected to significantly affect some companies, potentially limiting their ability to offer low prices. Nonetheless, Capital Economics' chief China economist believes China can manage the impact of Trump's tariffs.
Despite the US running substantial trade deficits with China and the European Union, it enjoyed a small surplus with the UK. Overall, the US trade deficit, encompassing services, grew by 17% last year to $918.4 billion, with December seeing a deficit of $98.4 billion, the highest since March 2022.