Maersk and HMM container ships dock at the Port of Los Angeles on Wednesday, September 24, 2025 in Los Angeles, California, USA.
Eric Thayer | Bloomberg | Getty Images
The U.S. trade deficit has fallen to its lowest level since mid-2009, six months after President Donald Trump imposed tariffs, the Commerce Department reported Thursday.
The trade shortfall in October was just $29.4 billion, down 39% from the previous month, as exports rose and imports fell. Exports increased by 2.6%, but imports decreased by 3.2%.
This total was the lowest since the second quarter of 2009, as the United States was just emerging from the financial crisis and Great Recession.
The numbers reflect trade activity since President Trump imposed tariffs on “Emancipation Day” in April 2025. Economists and policymakers feared the levy would invite retaliation and work against the United States by slowing the movement of goods and services around the world. But President Trump has reversed many of his toughest tariff threats, and data shows the market for U.S. products is strong.
Indeed, the year-to-date deficit is still 7.7% higher than the same period in 2024.
Still, the slowing in imbalances “will provide a much-needed boost to economic growth in the fourth quarter, which was hit hard by the federal government shutdown,” said Chris Rapkey, chief economist at Foudbonds.
He added: “While the United States appears to be winning the trade war with tariffs that restrict imports of foreign goods, our trading partners continue to buy more of our products and services and hold no grudges.” “U.S. recession predictions have been off the mark so far, as productivity continues to hold back growth.”
In fact, productivity rose 4.9% in the third quarter, according to a separate report released Thursday by the Bureau of Labor Statistics.
Due to productivity gains, unit labor costs fell by 1.9% over the same period, which was much higher than expected and shows that the labor market is not putting upward pressure on inflation.
Matthew Martin, senior economist at Oxford Economics, said: “The latest figures suggest that businesses are getting more done with less workers, lending credence to rising unemployment.” “Productivity is key in determining the speed limit of the economy and the dynamics of inflation. If productivity growth continues to accelerate due to tax cuts, deregulation, and technological advances including AI, economic growth could accelerate without causing unwanted inflation.”
Although employment is down, the Labor Department reported Thursday that layoffs remain low.
New jobless claims totaled 208,000 for the week ending January 3, the lowest four-week moving average since April 27, 2024.
