The United States' goods trade deficit widened to a record high in 2025, the first year of sweeping tariff increases, as imports continued to rise, underscoring the limited impact of higher duties on narrowing the trade gap.

Data released by the US Commerce Department on Thursday showed that the goods trade deficit reached $1.24 trillion in 2025, up 2.1 percent from a year earlier. The figures highlight resilient demand among US businesses and consumers for imported products despite significantly higher tariff barriers.

Goods exports totalled $2.2 trillion last year, while imports stood at $3.44 trillion. The US goods trade deficit with the European Union narrowed to $218.8 billion. In contrast, the shortfall with Mexico widened to $196.9 billion, and the deficit with Vietnam expanded to $178.2 billion.

Total goods imports rose about 4 percent from 2024, suggesting the scale of US overseas purchasing remained largely unchanged through the transition from the Biden administration to the Trump administration.

Separately, the US Commerce Department said the overall goods and services trade deficit widened to $70.3 billion in December 2025, up 32.6 percent from the previous month, marking a second straight sharp monthly increase.

The Trump administration has argued that higher tariffs would shrink the trade deficit. But the 2025 figures tell a different story. 

"The deficit in 2025 shows how little effect tariffs have had, for now, on the overall level of the deficit while distorting monthly trade flows as American businesses adapted to the changes in tariffs," Eugenio Aleman, chief economist at Raymond James, was quoted by MarketWatch as saying.

(Cover via VCG)