President Donald Trump’s erratic tariff policy, aimed at rewriting the rules of global commerce, has so far failed to curb U.S. imports or slash the trade deficit as promised, data released Thursday revealed.
It’s been a year of trade whiplash, with companies front-loading products in anticipation of the so-called “reciprocal” tariffs taking effect and then putting the brakes on altogether.
More from Sourcing Journal
But with a $901.5 billion gap between imports and exports in goods and services in 2025, or just 0.2 percent down from $903.5 billion in 2024, according to the Commerce Department’s Bureau of Economic Analysis, the United States has far from ceded its position as a net importer despite fears—or hopes—of weakened trade.
Even the narrow decline in the trade deficit was due to a growing surplus in services, such as transport and travel. Overall imports last year were a record-breaking $4.3 trillion, up nearly 5 percent from 2024’s $4.1 trillion, as American companies snapped up computer chips and other tech to support investments in AI. Meanwhile, exports, boosted by semiconductor and pharmaceutical sales, also hit a new high at $3.4 trillion—a 6 percent year-over-year increase.
The United States had more success decoupling from China, with American imports of Chinese goods plummeting by nearly 32 percent to $202 billion in 2025. U.S. businesses, looking to escape sky-high tariffs of as much as 145 percent when tensions were highest, found sourcing sanctuary in countries such as Taiwan, where the goods deficit doubled from $73.7 billion to almost $146.8 billion, and Vietnam, where the same gap widened 44 percent from $123.5 billion to $178.2 billion.
The U.S. goods trade deficit with Mexico reached a record high of approximately $197 billion in 2025, with total goods trade of nearly $840 billion. Canada’s, however, shrank 26 percent to $46.4 billion—its lowest level outside of the Covid-19 pandemic. This comes just as the White House is threatening to scuttle the United States-Mexico-Canada Agreement, which is poised for review in July, in favor of bilateral deals—or no deal at all.
“We’re not wedded to any particular agreement or format of an agreement simply because it’s there,” Jamieson Greer, the U.S. trade representative, told the New York Times in January. In another interview this month, he said that the president was “half inclined to leave. So we’ll see how that goes.”
The United States posted the largest trade deficit with the European Union at $218.8 billion, even as the Washington-Brussels relationship has become increasingly fraught, not only over Greenland’s sovereignty, but because the Trump administration says that the bloc’s online content regulations force censorship and unduly burden American businesses.
As the new tariff regime has worn on, it has proven to be deeply unpopular, with 60 percent of American voters saying they disapprove of the increases. A study last week from the New York Federal Reserve found that 90 percent of the cost of increased tariffs was paid for by U.S. companies and shoppers, not the countries exporting goods to America. Another analysis from the JPMorganChase Institute on Thursday showed that monthly tariff payments by mid-sized U.S. businesses tripled in 2025, with at least 43 percent of those costs being passed onto consumers.
Still, a much-awaited Supreme Court ruling about whether the president has the authority to use the 1977 law known as the International Emergency Economic Powers Act to impose the tariffs could upend that calculus. If the levies are nullified, according to the University of Pennsylvania’s Wharton School, the federal government could owe businesses as much as $168 billion in refunds, though officials have also said that they would find alternative means to replace them.
On Wednesday, less than 12 hours before the official figures were published, Trump wrote on social media that the “TRADE DEFICIT HAS BEEN REDUCED BY 78 PERCENT BECAUSE OF THE TARIFFS BEING CHARGED TO OTHER COMPANIES AND COUNTRIES,” a claim that data doesn’t bear out. He also insisted that the trade gap “WILL GO INTO POSITIVE TERRITORY DURING THIS YEAR, FOR THE FIRST TIME IN MANY DECADES.” The odds of that, too, appear vanishingly remote.
“For the year 2025, the administration did not get the desired adjustment to the trade deficit, which narrowed 0.2 percent,” Meagan Martin-Schoenberger, senior economist at KPMG, wrote in a note. “That shows progress on supply chains can be slow; finding new suppliers can be difficult in industries where relationships are baked into the cake. In 2026, we expect that the trade deficit is unlikely to narrow much further.”