The US trade deficit widened significantly in December, according to data released by the Commerce Department’s Bureau of Economic Analysis and Census Bureau. The trade gap increased by 32.6 per cent to $US70.3 billion ($99.7 billion), marking a five-month high. This figure exceeded economists’ forecasts, who had anticipated a contraction to $US55.5 billion, according to a Reuters poll. For the full year 2025, the trade deficit narrowed slightly by 0.2 per cent to $US901.5 billion.
The goods trade gap saw a notable increase, widening by 2.1 per cent to reach an all-time high of $US1.24 trillion. Record goods trade deficits were recorded with several countries, including Mexico, Vietnam, Taiwan, Ireland, Thailand, and India. However, the goods trade deficit with China decreased from $US295.5 billion in 2024 to $US202.1 billion in 2025.
Economists offered insights on the data. Chris Rupkey of FWDBonds noted the reversal of the trade deficit, stating that hopes for the success of tariff economic policies had diminished. Grace Zwemmer from Oxford Economics highlighted the depreciation of the trade-weighted dollar, which has fallen by nearly 2 per cent since the start of 2026, following an 8 per cent depreciation last year, potentially boosting US exports. Brian Wesbury of First Trust pointed out the evolving landscape of global trade, with China’s exports to the US declining and increased demand for high-tech equipment driving up imports of computer accessories.
Wesbury added that there was accelerated demand for high tech equipment with the US importing almost $US145 billion more of computer accessories than in 2024 and the trade deficit with Taiwan reaching a record high $US147 billion for the year.
