Portugal Colonial - US trade gap hits new record in January as tariff fears loomed

Trump returned to the White House this year with pledges to ease cost-of-living pressures for voters, but on the campaign trail he also raised the possibility of sweeping levies across US imports.

The overall trade gap of the world's biggest economy ballooned 34 percent to $131.4 billion, on the back of a 10 percent jump in imports for the month, said the Commerce Department.

This was the widest deficit for a month on record, dating back to 1992, and the expansion was more than analysts anticipated.

The latest figures came after the US economy saw its goods deficit hit a fresh record too for the full year of 2024 -- at $1.2 trillion.

In January, imports came in at $401.2 billion, and this was $36.6 billion more than the level in December, Commerce Department data showed.

US exports, meanwhile, rose $3.3 billion between December and January to $269.8 billion.

Among sectors, imports of industrial goods jumped, and imports of consumer goods rose notably by $6.0 billion.

US deficits with other economies were a key focus of Trump's first administration from 2017 to 2021, and at the time he waged a bruising tariffs war with China in particular.

This time the Trump administration has referred to tariffs as a means to raise government revenue, remedy imbalances and exert pressure on other governments over American priorities.

In January, US goods deficits with China and the European Union both widened.

On the campaign trail last year ahead of November's election, Trump vowed reciprocal tariffs on nations that taxed US-made products, dubbing this the "Trump Reciprocal Trade Act."

Since returning to office, Trump has launched plans for "reciprocal tariffs" tailored to each US trading partner, to tackle trade practices deemed unfair by Washington.

He has promised an announcement on these levies on April 2, while also threatening tariffs on other imports ranging from semiconductors to autos.

Trump hiked tariffs on steel and aluminum imports in his first presidential term too -- an action he has revived since returning to office.

A sharp 25 percent levy on the metals are set to take effect this month.

January's record trade gap is the widest since March 2022, according to Commerce Department figures.

P.Cavaco--PC