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US Trade Deficit Widens, Capping One of Biggest Since 1960

The US trade deficit widened in December, capping a turbulent year of erratic tariff policy.

The goods and services trade gap expanded from the prior month to $70.3 billion, Commerce Department data showed Thursday. The shortfall culminated in a full-year deficit of $901.5 billion, still one of the largest in data back to 1960.

The December deficit reflected a 3.6% increase in the value of imports. Exports of goods and services declined 1.7%. The median estimate in a Bloomberg survey of economists called for a $55.5 billion overall shortfall.

The trade data were notably volatile in 2025 on a month-to-month basis as US importers reacted to a persistent drumbeat of tariff announcements from President Donald Trump. Gold and pharmaceutical imports were particularly choppy as companies raced to beat higher duties.

The increase in goods imports in December included gains in computer accessories and motor vehicles. The decline in exports largely reflected fewer outbound shipments of gold, according to the trade report.

The latest trade data will help economists firm up their estimates for fourth-quarter gross domestic product, which will be released on Friday. Before the figures, the Federal Reserve Bank of Atlanta’s GDPNow forecast net exports would add about 0.6 percentage point to fourth-quarter growth, now estimated at 3.6%.

After adjusting for changes in prices, which filters into the real GDP measurement, the merchandise trade deficit widened to $97.1 billion in December, the most since July. Trade in gold, unless used for industrial purposes such as in the production of jewelry, is excluded from the government’s GDP calculation.

Trump has leaned on tariffs as part of his strategy to reduce reliance on foreign goods, encourage domestic investment and correct decades of declines in manufacturing employment. He and his economic team have criticized research concluding that Americans have borne the costs of tariffs.

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Hassett Attacks NY Fed for Study on Tariffs Hurting US Companies

National Economic Council Director Kevin Hassett said a study from the Federal Reserve Bank of New York showing US companies bear most of the tariff burden “is an embarrassment” and the people associated with it should be “disciplined.”

“What they’ve done is they put out a conclusion which has created a lot of news that’s highly partisan, based on analysis that wouldn’t be accepted in a first semester econ class,” Hassett said Wednesday on CNBC.

Hassett said US consumers will be made better off by tariffs.

The paper published last week by the New York Fed found that nearly 90% of the economic burden from tariffs in 2025 was borne by US companies and consumers. The New York Fed did not immediately respond to a request for comment.