US trade gap widens as goods deficit hits record $1.24 trillion in 2025
Times of India
by TOI BUSINESS DESKFebruary 19, 2026
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The U.S. trade deficit in goods reached a record high of $1.24 trillion in 2025, marking a significant increase despite the imposition of tariffs by President Donald Trump during his first year back in office. According to data from the Commerce Department, this figure surpassed the previous year's level, reflecting persistent strength in imports even as overall trade flows expanded. While tariffs were implemented, they appeared insufficient to curtail the growing imbalance, with December alone showing a $17.3 billion rise in the goods and services deficit compared to November.
The data revealed that U.S. exports declined slightly in December, reaching $287.3 billion, while imports surged to $357.6 billion—a $12.3 billion increase. This trend was driven by a significant jump in the goods deficit to $99.3 billion and a narrowing services surplus, which fell to $29.0 billion from $30.6 billion. However, for the full year, the combined goods and services deficit edged lower by $2.1 billion to $901.5 billion, with exports growing 6.2% to $3.4 trillion and imports increasing 4.8% to $4.3 trillion. The decline in the overall deficit was attributed to a larger services surplus, which expanded by $27.6 billion to $339.5 billion.
Trade flows showed sector-specific trends, with goods exports benefiting from gains in capital goods, computers, civilian aircraft, and industrial supplies. Imports, on the other hand, surged in capital equipment, telecommunications gear, and computer accessories. Services exports also strengthened, led by business services, intellectual property charges, and financial services. Monthly data highlighted shifting trade balances with key partners: the U.S. recorded deficits with countries like China ($12.4 billion), Vietnam ($17.6 billion), and Mexico ($14.5 billion), while surpluses were seen with the Netherlands, the United Kingdom, and Brazil.
This widening trade deficit underscores broader challenges for U.S. trade policy and economic strategy. While exports grew modestly, imports outpaced them significantly, contributing to a record-breaking goods deficit. The
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Originally published on Times of India on 2/19/2026