January Trade Deficit Narrows Sharply as Exports Hit Record High, Delayed Data Show

02:53 PM EDT, 03/12/2026 (MT Newswires) -- The US trade deficit narrowed sharply in January as exports hit an all-time high and imports fell, delayed government data showed Thursday.

The goods and services deficit shrank by 25% sequentially to $54.46 billion in January on a seasonally adjusted basis, the Census Bureau and the Bureau of Economic Analysis said. The consensus was for a deficit of $66 billion in a Bloomberg-compiled survey.

Exports increased 5.5% to $302.15 billion in January, the highest on record, with the services component also hitting an all-time high, according to the official data. Imports decreased 0.7% to $356.60 billion, even as the services component reached a record high. The report was delayed because of last year's US federal government shutdown.

The real trade deficit was still "modestly" wider in January than in the fourth quarter when adjusted for price changes, BMO Capital Markets Senior Economist Sal Guatieri said in a note.

"It could widen further in the months ahead if importers again try to beat looming new tariffs to replace the earlier unlawful ones," Guatieri wrote. "So, net exports still look to subtract from (first-quarter) real (gross domestic product) growth for the first time in four quarters."

Last month, the US Supreme Court invalidated President Donald Trump's reciprocal tariffs imposed in 2025 under the International Emergency Economic Powers Act. Following that decision, Trump announced a 10% global tariff, which he later said would rise to 15%.

The US ran a $12.54 billion deficit in goods trade with China in January, compared with a $12.36 billion gap the month prior, official data showed Thursday. The deficit with Mexico fell to $12.79 billion from $14.52 billion. The goods trade deficit with the European Union narrowed to $6.07 billion from December's $11.09 billion. The shortfall with Canada shrank to $2.69 billion from $4.93 billion.

"The US trade balance will benefit from rising energy prices due to the Iran conflict, but real net exports are still likely to weigh on GDP growth this year as resilient domestic demand pulls in imports," Guatieri said.

Oil prices have surged recently following Iran's effective closure of the Strait of Hormuz -- the world's most important chokepoint for crude flows -- amid its ongoing war with the US and Israel that started at the end of last month.

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