The U.S. trade deficit surged 14% to a record $140.5 billion in March, as businesses rushed to import goods ahead of steep tariffs, the Commerce Department reported Tuesday. This import surge dragged first-quarter GDP into negative territory for the first time in three years, shrinking the economy at an annualized rate of 0.3%. Imports hit an all-time high of $419 billion, with goods imports soaring 5.4% to $346.8 billion. Exports rose modestly to $278.5 billion.
The spike followed President Trump’s tariff hikes, including a 145% duty on Chinese goods, which took effect in early April. While tariffs with most partners are suspended for 90 days, U.S.-China trade tensions have escalated. Economists expect imports to slow by May, potentially aiding a GDP rebound in Q2. However, falling exports and fewer foreign visitors — amid backlash over tariffs, immigration policies, and Trump’s comments about annexing Canada and Greenland — could undercut any recovery.
