The United States’ trade deficit fell for the second straight month as US companies boosted imports of computer chips and other technology goods.
Published on February 19, 2026
The United States’ trade deficit widened sharply in December due to a surge in imports, and the goods deficit was the highest on record in 2025, even after US President Donald Trump imposed tariffs on foreign-made goods.
The second consecutive monthly decline in the trade deficit reported by the US Commerce Department on Thursday indicated that trade contributed little or nothing to gross domestic product (GDP) in the fourth quarter.
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Last year, exports grew by 6 percent and imports by nearly 5 percent.
The U.S. goods trade deficit widened 2 percent to a record $1.24 trillion last year as U.S. companies boosted imports of computer chips and other technology goods from Taiwan to support big investments in artificial intelligence.
Amid continued tensions with Beijing, the goods trade deficit with China is set to shrink by around 32 per cent to $202bn in 2025 as both exports and imports in the world’s second-largest economy fall sharply. But trade was diverted away from China. The goods gap with Taiwan more than doubled to $147bn and with Vietnam increased by 44 per cent to $178bn.
Trump last year imposed tariffs against trading partners aimed at correcting trade imbalances and protecting US industries. But the punitive duties did not lead to a manufacturing renaissance, with factory employment falling by 83,000 jobs between January 2025 and January 2026.
“There is no evidence in the economic research literature to suggest that tariffs have historically materially affected trade deficits when countries have implemented them,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.
The trade gap widened 32.6 percent to a five-month high of $70.3 billion, the Commerce Department’s Bureau of Economic Analysis and the US Census Bureau said. Economists polled by Reuters had forecast the trade deficit to narrow to $55.5 billion.
The report was delayed last year due to a government shutdown.
Imports rose 3.6 percent to $357.6 billion in December. Imports of goods rose 3.8 percent to $280.2 billion, driven by a $7 billion increase in industrial supplies and materials, mainly non-monetary gold, copper and crude oil. Imports of capital goods rose by $5.6bn, lifted by computer equipment and telecommunications equipment. This growth is related to the construction of data centers to support artificial intelligence.
But imports of consumer goods fell, dragged down by pharmaceutical preparations. Imports of pharmaceutical preparations have been drastically altered by tariffs.
“But strong imports also show strength in details like inventory or business investment,” said Veronica Clark, an economist at Citigroup.
Exports fell 1.7 percent to $287.3 billion in December. But exports of capital goods rose, boosted by semiconductors. Exports of consumer goods including pharmaceutical preparations have increased.