The US trade deficit soared to a record $140.5 billion (€123.6bn) in March as consumers and businesses alike tried to get ahead of President Donald Trump’s latest and most sweeping tariffs — with federal data showing an enormous stockpiling of pharmaceutical products.
The deficit — which measures the gap between the value of goods and services the US sells abroad against what it buys — has roughly doubled over the last year. In March 2024, that gap was just under $68.6bn (€60.3bn), according to the US Department of Commerce.
According to federal data released on Tuesday, US exports for goods and services totalled about $278.5bn (€244.9bn) in March, while imports climbed to nearly $419bn (368.5bn). That’s up $500 million (€439.7m) and $17.8bn (€15.7bn), respectively, from February trade.
Consumer goods boost US imports
Consumer goods led the imports surge — increasing by $22.5bn (€19.8bn) in March. Pharma products in particular climbed $20.9bn (€18.4bn), the US Census Bureau and Bureau of Economic Analysis noted, signalling that drug makers sought to get ahead of Trump’s threats to slap tariffs on the sector.
“While we had known consumer goods accounted for the bulk of March’s rise, we can now see pharmaceutical products were $20bn (€17.6bn) higher — almost all of which were imported from Ireland,” analysts at Oxford Economics wrote in a Tuesday research note. “Uncertainty remains high, and broader signs of front-loading may be visible in coming months.”
Because pharma accounted for so much of this surge, the big rise in imports doesn’t necessarily mean other sectors used March to stockpile in the same way. Retailers, for example, may not have bought as many clothes, toys and furniture from abroad — perhaps because they were already feeling the effects of previously-implemented levies, some analysts say, or because they decided to hold off on rushing in new inventory due to uncertainty.
Either way, this may signal supply challenges down the road — with shoppers potentially seeing barer shelves for products that run out of inventory in the coming months.
Still, imports of “capital goods,” like computers, as well as automotive parts and cars, also increased in March. But industrial supplies and materials, such as metal and crude oil coming into the US, fell — notably as steel and aluminium tariffs and other levies impacting energy took effect. Service-based imports like travel also decreased.
Overall, imports are flooding into the US for products that have — or rather, are feared to soon be — caught in the crosshairs of the ongoing trade war. Since taking office in January, Trump has threatened and imposed a series of steep tariffs.
Tariffs contributed to increased US trade deficit, higher business costs
Much of March, in particular, was filled with anticipation and uncertainty leading up to what the president called “Liberation Day” on 2 April, when he announced new import taxes on nearly all of America’s trading partners. With the exception of China, higher tariff rates for many countries have since been postponed — but other sweeping levies remain.
The White House insists that new tariffs will help close long-standing trade deficits (the US hasn’t sold the rest of the world more than it’s bought since 1975), reinvigorate manufacturing in America and generate government revenue. But economists are warning of significant consequences for businesses, households and economies worldwide under the rates that Trump has proposed.
These new tariffs are already increasing operating costs for businesses that rely on a global supply chain — which, in turn, will hike prices for a range of goods that consumers buy each day.
The recent surge in imports reflects efforts by companies across the country to bring in foreign goods before more duties kicked in. New orders for manufactured durable goods, for example, jumped 9.2% to $315.7bn (€277.8bn) in March, Census Bureau data released last month shows.
March’s trade deficit surpasses the last monthly record of $130.7bn (€115bn) reported in January — also due to tariff uncertainty after Trump took office, marking a more than $32bn (€28.2bn) jump from December.
All of this contributed to shrinking economic growth in the first three months of the year. Last week, the Commerce Department reported that the US gross domestic product — or output of goods and services — fell 0.3% on an annual basis from January through March, marking the first drop in three years.
Imports grew at a total 41% pace for that period, its fastest rate since 2020, shaving 5 percentage points off first-quarter growth. However, that surge is likely to reverse in the second quarter, removing some weight on GDP.
