The United States closed out 2025 with a trade deficit of $901.5 billion — essentially unchanged from the year before and one of the largest on record — a result that arrives after a year defined by the most aggressive American tariff policy in decades.

The Commerce Department's Bureau of Economic Analysis and the U.S. Census Bureau released the figures on February 19, a report that had been delayed by a federal government shutdown. The bottom line was straightforward: the combined goods and services deficit shrank by just $2.1 billion from 2024's $903.5 billion, a reduction of 0.2 percent that economists were quick to describe as negligible.

Exports rose 6.2 percent to $3.43 trillion. Imports grew 4.8 percent to $4.33 trillion. The gap between the two remained vast.

The Goods Deficit Hits a Record

Buried within that headline figure is a more striking number. The deficit in goods trade alone — the segment that has been the central target of the Trump administration's tariff push — widened to a record $1.24 trillion, up 2.1 percent from 2024.

Much of that increase traces back to a surge in technology imports. American companies spent heavily on computers, computer accessories, and telecommunications equipment, much of it sourced from Asia to support a national build-out of artificial intelligence infrastructure. Capital goods imports rose $165.9 billion for the year, the single largest category driving the increase.

The services trade offered a counterweight. The U.S. surplus in services — covering areas like financial products, travel, and intellectual property licensing — grew to $339.4 billion, up from $311.8 billion the prior year, and helped hold the combined deficit roughly flat.

Tariffs Redirected Trade Without Reducing It

When President Trump announced sweeping tariffs across nearly all U.S. trading partners in April 2025, the stated objectives included narrowing trade imbalances and pushing manufacturing back onto American soil. The year-end data tells a more complicated story.

The goods deficit with China fell sharply — down 31.6 percent to $202.1 billion, from $295.5 billion in 2024 — as American importers cut purchases and shifted supply chains. But that trade didn't disappear. It moved.

The goods deficit with Vietnam expanded 44 percent to $178.2 billion. The deficit with Taiwan more than doubled to $146.8 billion, driven by the same AI-related demand for chips and computing hardware that had previously run through Chinese suppliers. Record bilateral goods deficits were also posted with Mexico, Ireland, Thailand, and India.

Chad Bown of the Peterson Institute for International Economics put it plainly: "There just isn't any evidence out there in the economic research literature to suggest that tariffs have materially impacted trade deficits historically when countries have implemented them."

Factory employment in the U.S. declined by 83,000 jobs between January 2025 and January 2026, according to the Reuters report on the data.

December's Numbers Add Complications

The monthly figures for December added their own wrinkle. The trade deficit jumped 32.6 percent in that one month to $70.3 billion, well above the $55.5 billion consensus estimate among Wall Street economists. Imports climbed to $357.6 billion while exports fell to $287.3 billion.

The Atlanta Federal Reserve, responding to the release, trimmed its fourth-quarter GDP growth estimate from 3.6 percent to 3.0 percent annualized. The surge in December imports was largely driven by industrial supplies and capital goods rather than consumer purchases, which economists noted should translate into stronger business investment figures down the line.

Who Is Paying for the Tariffs

The question of who actually absorbs the cost of import taxes has been contested throughout the year. Researchers at the Federal Reserve Bank of New York estimated in February that U.S. firms and consumers bear approximately 86 percent of tariff costs, with foreign exporters covering the remainder. The White House rejected that conclusion sharply. National Economic Council Director Kevin Hassett called the paper the worst he had seen "in the history of the Federal Reserve System" and suggested its authors should face professional consequences.

Separate research from the JPMorganChase Institute found that tariffs paid by midsized American firms tripled in 2025. Those businesses, which employ roughly 48 million workers collectively, responded by raising prices, pulling back on hiring, or accepting reduced margins.

The average U.S. tariff rate rose from around 2.3 percent when Trump took office to 13 percent by year-end, according to the Yale Budget Lab. Consumer prices are estimated to be roughly 0.8 percentage points higher than they otherwise would have been. The federal government collected nearly $100 billion in tariff revenue over the course of the fiscal year, exceeding total collections from the prior year.

The Supreme Court has since weighed in on the legal basis for the tariffs, with the administration signaling it will turn to alternative authorities to pursue its broader trade objectives.