The US deficit with global trading partners fell at the largest amount on record in April as businesses and consumers stopped rushing to get imports ahead of President Donald Trump’s tariffs.
A Commerce Department report on Thursday said the deficit slipped to $61.6 billion following a record surge in trade imbalances, with a $76.7 billion decline from the previous month and a Dow Jones consensus below $66.3 billion.
The move reverses the massive surge in imports that preceded Trump’s April 2nd release of “liberation day.”
In a move that was even more aggressive than expected, Trump slapped 10% of the US import obligations and released a menu of so-called mutual tariffs aimed at taking into account unfair trade practices from dozens of countries.
Since then, Trump has retreated mutual accusations in place of a 90-day negotiation period. Similarly, he ratcheted taxes specifically targeting China.
Imports slowed sharply in April, falling 16.3% to $351 billion. At the same time, exports accelerated, rising by 3%.
“The “deficit” means bad, but in this case the story is even more subtle. International trade is good for the US economy. Imports beyond exports benefit Americans.” “So, when the trade deficit shrinks, we need to be aware that we interpret this as completely positive news.”
Since the beginning of the year, the deficit has risen 65.7% from the same period in 2024.
The biggest commodity imbalance came from China at $19.7 billion, followed by the European Union ($17.9 billion) and Vietnam ($14.5 billion).
In the latest developments on the trade front, Trump on Thursday said additional talks were held with China. Trump said he was deemed a “very good” call with Chinese President Xi Jinping for 90 minutes.
