Import Drop Shrinks Trade Deficit

The U.S. international trade deficit in goods and services fell to $61.6 billion in April, a 55.5% decline from March’s revised $138.3 billion, according to data released jointly by the U.S. Census Bureau and the Bureau of Economic Analysis.

Much of the decline was due to a record 16.3% plunge in imports. That, in turn, was "largely payback from earlier front-running of tariffs, but also due to the effective embargo on shipments from China owing to the temporary spike in reciprocal duties to 125% that month, " according to Sal Guateri at BMO Economics.

Exports rose by $8.3 billion to $289.4 billion, while imports dropped sharply by $68.4 billion to $351.0 billion. The goods deficit decreased by $75.2 billion to $87.4 billion, and the services surplus rose by $1.5 billion to $25.8 billion.

Goods exports were driven by a $10.4 billion rise in industrial supplies and materials, including an $8.1 billion increase in finished metal shapes and a $4.2 billion gain in nonmonetary gold. In contrast, exports of automotive vehicles declined $3.3 billion.

Goods imports fell primarily due to a $33.0 billion drop in consumer goods—led by a $26.0 billion fall in pharmaceutical preparations—and a $23.3 billion decrease in industrial supplies. Automotive imports also declined by $8.3 billion.

Year-to-date, the goods and services deficit reached $452.3 billion, up 65.7% from the same period in 2024. Exports increased 5.5% year-over-year, while imports rose 17.8%.

Notable monthly trade balances included a $6.9 billion surplus with Hong Kong and a $19.7 billion deficit with China. The U.S. shifted from a $15.4 billion goods deficit with Switzerland in March to a $3.5 billion surplus in April, largely due to a $13.4 billion decline in imports.

The next report, covering May 2025, will be released on July 3, 2025.

Sources:

U.S. Census Bureau: www.census.gov/foreign-trade/Press-Release/current_press_release/index.html

Bureau of Economic Analysis: www.bea.gov