US trade deficit widens sharply in December; goods trade gap highest on record in 2025

WASHINGTON, Feb 19 (Reuters) - The U.S. trade deficit widened sharply in December amid a surge in imports, and the goods shortfall in 2025 was the highest on record despite President Donald Trump's tariffs on foreign manufactured merchandise.

The trade gap ballooned 32.6% ?to $70.3 billion, the Commerce Department's Bureau of Economic Analysis ?and Census Bureau said on Thursday. Economists polled by Reuters forecast the trade deficit would contract to $55.5 billion. The ?trade deficit narrowed 0.2% to $901.5 billion in 2025. The goods trade gap widened 2.1% ?to an all-time high of $1.24 trillion.

Trump last year unleashed a ?barrage of tariffs ?against trading partners with the aim, among other things, to address trade imbalances and protect U.S. industries. But the ?punitive duties have not yielded a manufacturing renaissance, ?with factory employment declining by 83,000 jobs from January 2025 through January 2026.

The report was delayed because of last year's government shutdown. Imports increased ?3.6% to $357.6 billion in December. Goods imports ?surged 3.8% ?to $280.2 billion, boosted by a $7.0 billion increase in industrial supplies and materials, mostly non-monetary gold, copper and crude oil.

Capital goods imports increased $5.6 billion, lifted by computer accessories ?and telecommunications equipment. That rise is likely related to the construction of data ?centers to support artificial intelligence.

But consumer goods imports fell, pulled down by pharmaceutical preparations. There have been large swings in imports of pharmaceutical preparations.

Goods imports increased 4.3% to $3.44 trillion in 2025.

Exports fell 1.7% to $287.3 billion in December. Goods exports dropped 2.9% to $180.8 billion, ?weighed ?down by an $8.7 billion decline in industrial supplies and materials, mostly non-monetary ?gold. Exports of other goods fell.

But capital goods exports increased, boosted by semiconductors. There ?were increases in exports of consumer goods, including pharmaceutical preparations. Exports of goods increased 5.7% to $2.20 trillion in 2025.

The goods trade deficit widened 18.8% to $99.3 billion. Imports of services increased $2.0 billion to $77.4 billion in December amid gains in transport and travel services. Exports of services increased $0.5 billion to $106.5 billion.

The larger-than-expected trade deficit could prompt economists to lower their gross domestic product growth estimates for the ?fourth quarter. The BEA is scheduled to publish its delayed advance fourth-quarter GDP estimate on Friday. The economy likely grew at a 3.0% annualized rate last quarter after expanding at ?a 4.4% pace in the ?July-September quarter, a Reuters survey of economists showed. (Reporting by Lucia ?Mutikani; Editing by Paul Simao)