US Foreign Trade Gap Widens to $394.3 Billion in Q1 2025 Despite Trump Steps

By Prathapan Bhaskaran - May 20, 2025, 07:11 AM ET

Last Updated - May 20, 2025, 10:47 AM EDT

Goods gap deepens in goods trade while services maintain surplus; March sees sharpest monthly deficit

The U.S. international trade deficit reached $394.3 billion in the first quarter of 2025, according to government data. This is an increase from the previous quarter as the gap widened, driven primarily by an imbalance in goods trade, despite a steady surplus in services.

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The rise in the deficit is in contrast to President Donald Trump's claims that his decision to drastically raise the tariffs would cut down the trade gap with major U.S. trade partners.

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Quarterly Overview: Trade Components

From January to March 2025, U.S. exports totaled $827 billion, comprising $538.8 billion in goods and $288.21 billion in services. Imports during the same period stood at $1.2 trillion, with goods accounting for $1.01 trillion and services for $216.2 billion.

The goods trade deficit was $466.3 billion for the quarter, while the services sector posted a surplus of $72 billion.

Timeline

• January 2025: The overall trade deficit was $130.65 billion, with goods at a $155.82 billion deficit and services generating a $25.17 billion surplus. Exports amounted to $270.51 billion, while imports were $401.16 billion.

• February 2025 (Revised): The deficit narrowed slightly to $123.20 billion. Exports increased to $278.00 billion, led by a rise in goods exports to $181.90 billion. Imports held steady at $401.20 billion.

• March 2025: The trade deficit expanded to $140.50 billion, the highest in the quarter. Total exports remained nearly flat at $278.46 billion, but imports surged to $418.96 billion, driven by a rise in goods imports to $346.75 billion.

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Key Takeaways

• The U.S. continues to run a significant goods trade deficit, offset only partially by a consistent services surplus.

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• March's surge in goods imports contributed to the highest monthly trade gap of the quarter.

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• Export growth remains modest, unable to keep pace with rising import demand, especially for goods.

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These figures suggest that while the U.S. services sector remains strong internationally, structural imbalances in goods trade continue to weigh heavily on the overall trade balance.