Analysis: US trade deficit narrows slightly but remains historically high

The US imported more goods and services than it exported in 2025, resulting in a trade deficit of $901.5 billion (€765B) last year, according to data from the US Census Bureau and the US Bureau of Economic Analysis (BEA).

While this figure is $2.1 billion (€1.8B), or 0.2% smaller than the deficit recorded in 2024 – suggesting a slight move toward closing the trade gap – it is still the third-largest deficit on record, behind only 2022, when the deficit reached a record $923.7 billion (€784B), and 2024.

*Difference between exports and imports. A positive value indicates a trade surplus, meaning the country exports more than it imports, while a negative value indicates a trade deficit, meaning it imports more than it exports.

The figure also presents a record duality: the country registered not only an increase in the goods deficit, but also the highest negative balance on record, at $1.24 trillion (€1T).

This was offset, however, by growth in the services surplus, which was also a record high, but on the positive side, at $339.5 billion (€288B).

Tariff war

The release of the results was eagerly awaited by the market, as the trade deficit was one of the main drivers behind the additional tariffs policy adopted by President Donald Trump in 2025.

In an assessment by market intelligence provider Argus Media, the “on-again, off-again tariffs” policy throughout the year “helped to drive down the value of the dollar and unravel longstanding US relationships, most importantly with traditional allies like the EU and Canada.”

Therefore, if a weaker dollar favored US exports, strained relations with other countries undermined that effect.

Exports

Annual general exports totaled $3.4 trillion (€2.9T), up 6.2% from 2024. International sales of goods accounted for 65% of the balance, rising to $2.2 trillion (€1.8T) in 2025, driven by computers and accessories, civilian aircraft and related engines, industrial supplies and materials, gold, metal shapes and natural gas.

Exports of services reached $1.2 trillion (€1T) – or 35% of total international sales, especially driven by charges for the use of intellectual property and financial services.

Imports

Annual international purchases increased 4.8% YoY, amounting to $4.2 trillion (€3.5T) last year. Imports of services, which reached $895.4 billion (€760B), were driven by the travel sector.

Imports of goods totaled $3.4 trillion (€2.9T), with strong growth also in computers and accessories, telecommunications equipment, metal products and gold.

Pet food

Although the US Census Bureau and the US Bureau of Economic Analysis do not provide segmentation by pet products, the US Department of Agriculture publishes trade data for dog and cat food.

While the US exported $2.44 billion (€2B) in 2025, it imported $2.35 billion (€1.9B), resulting in an $83.6 million (€71M) trade surplus.

The figure is significantly lower than that recorded in 2024, when the US exported $315.1 million (€267M) more dog and cat food than it imported.

Commercial partners

The regions with which the US had the largest trade surpluses (meaning exporting more than importing) were the Netherlands, South and Central America, the UK, Hong Kong and Brazil.

The highest deficits were recorded for a more extensive list: the European Union, China, Mexico, Vietnam, Taiwan, Thailand, Japan, India, South Korea, Canada, Switzerland, Malaysia, Indonesia and South Africa.

The institutes highlighted the increased imports from Taiwan and Vietnam, while imports from China decreased.

An analysis from the think tank Council on Foreign Relations suggests that “rather than reducing imports across the board, US companies simply moved away from Chinese goods, which were hit with some of the highest tariffs in 2025, and shifted to other suppliers such as Vietnam and Mexico.”

Despite tariff adjustments and shifts in supply sources, the US trade deficit continued its upward trend, underscoring that the battle against a negative trade balance is complex.