Imports Reach Record $364.9 Billion in December
Trade Deficit Hits $98.4 Billion, Largest Since March 2022
In December last year, the United States' trade deficit sharply widened to its largest level in 2 years and 9 months. This is analyzed as a result of companies proactively increasing imports due to tariff threats from U.S. President Donald Trump, and the continued strong dollar (King Dollar) phenomenon, which led American consumers to purchase relatively cheaper imported goods.
On the 5th (local time), the U.S. Department of Commerce announced that the trade deficit in December last year reached $98.4 billion. This is the largest trade deficit since March 2022.
The deficit widened by 24.7% from the previous month's $78.9 billion trade deficit. It also significantly exceeded expert forecasts ($96.5 billion).
Exports decreased by 2.6% to $266.5 billion. On the other hand, imports increased by 3.5% to a record high of $364.9 billion. With exports declining and imports rising, the trade deficit expanded sharply.
It is analyzed that the trade deficit surged as companies increased imports preemptively in response to President Trump's tariff hike warnings. Additionally, the U.S. economic boom and strong dollar led consumers to increase consumption of relatively cheaper imported goods, further expanding the trade deficit.
The annual trade deficit last year was $918.4 billion, a 17% increase compared to the previous year. Exports and imports recorded $3.1916 trillion and $4.1100 trillion respectively, leading to the expanded trade deficit.
By country, the largest trade deficit was with China at $295.4 billion. Next were the European Union (EU, $235.6 billion), Mexico ($171.8 billion), Vietnam ($123.5 billion), Ireland ($86.7 billion), Germany ($84.8 billion), Taiwan ($73.9 billion), Japan ($68.5 billion), and South Korea ($66.0 billion). President Trump is highly likely to threaten tariffs against countries with trade surpluses with the U.S. to resolve the trade deficit.
Earlier, President Trump signed an executive order imposing a 25% tariff on all imports from Canada and Mexico and an additional 10% tariff on all Chinese imports on top of existing tariffs, citing failure to stop illegal immigration and drugs entering the U.S. from Canada and Mexico. Although tariffs on Canada and Mexico were abruptly postponed for one month a day before enforcement, the tariff increase on China was implemented starting at midnight on the 4th.
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