Overview
- Official Commerce Department figures show the 2025 goods-and-services deficit at $901.5 billion (down 0.2% year over year), the December gap widening to $70.3 billion, and the annual goods shortfall hitting a record near $1.24 trillion.
- Trade shifted significantly away from China, where the goods deficit fell about 32% to roughly $202 billion, while gaps with Taiwan (~$147 billion), Vietnam (~$178 billion), and Mexico (~$196.9 billion) grew, and the European Union registered the largest goods deficit (~$218.8 billion).
- Volatile monthly flows reflected early-year front‑loading and a year‑end jump in AI‑related capital goods and non‑monetary gold, contributing to December’s larger imbalance.
- Independent research, including a New York Fed study, estimates roughly 90% of tariff costs were borne domestically, with midsize firms’ tariff payments tripling and the effective tariff rate rising to levels last seen in the 1930s.
- The release contradicts President Trump’s claim of a 78% deficit reduction, and the Supreme Court is expected to review the administration’s emergency‑authority tariffs soon.