(Bloomberg) — The US trade deficit widened to a record in January as companies scrambled to secure goods from overseas before President Donald Trump imposed tariffs on America’s largest trading partners.
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The gap in goods and services trade widened 34% from the prior month to $131.4 billion, Commerce Department data showed Thursday. The deficit was larger than all but one estimate in a Bloomberg survey of economists.
The value of imports rose 10% to a record $401.2 billion, while exports increased 1.2%. The figures aren’t adjusted for inflation.
Trump promised sweeping tariffs during the 2024 presidential campaign, and on Tuesday he handed down sweeping 25% duties on Canada and Mexico while doubling tariffs on Chinese goods to 20%. Canada and China immediately announced retaliatory measures, and Mexico is responding on Sunday.
Trump said on Wednesday he’s exempting automakers from newly imposed tariffs on Mexico and Canada for one month as a temporary reprieve following pleas from industry leaders. But Canadian Prime Minister Justin Trudeau is not open to lifting full package of retaliatory duties if Trump leaves any tariffs on Canada in place.
Canada’s trade surplus with the US jumped to a record at the start of the year, driven by exports of cars, auto parts and oil, separate data from Statistics Canada showed Thursday.
The Trump administration is using tariffs as part of a strategy to rectify what it sees as unfair trade policies in other countries. Trump is also seeking to stoke domestic production and job growth, while enhancing national security.
Separate figures Thursday showed initial jobless claims dropped by 21,000 — the most this year — to 221,000 last week.
The January flurry of imports was broad and included a surge in inbound shipments of industrial supplies and materials. Within that category, imports of finished metal shapes that include gold bullion jumped $20.5 billion, marking a second month of steep increases.
Much of that increase in gold imports came from Switzerland where the US trade deficit widened sharply. The nearly $23 billion gap during the month was second to only China.
Goods and services trade, excluding the impact of gold imports, may weigh on first-quarter gross domestic product after contributing slightly to growth in the closing months of 2024.
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