The US trade deficit widened to a record in January as companies scrambled to secure goods from overseas before President Donald Trump imposed tariffs on America’s largest trading partners.
The gap in goods and services trade widened 34% from the prior month to $131.4 billion, Commerce Department data showed Thursday. The deficit was larger than all but one estimate in a Bloomberg survey of economists.
Source: Bloomberg
The value of imports rose 10% to a record $401.2 billion, while exports increased 1.2%. The figures aren’t adjusted for inflation.
Canada’s trade surplus with the US jumped to a record at the start of the year, driven by exports of cars, auto parts and oil, separate data from Statistics Canada showed Thursday.
But, perhaps most notably, the January flurry of imports was broad and included a surge in inbound shipments of industrial supplies and materials. Within that category, imports of finished metal shapes that include gold bullion jumped $20.5 billion, marking a a second month of steep increases.
Obviously, by pure math, this is not good at all for Q1 GDP (as we already saw The Atlanta Fed's GDPNOW forecast crashing). However, complaining about a decline in GDP due to massive imports of precious metals seems ironic at the very least. Furthermore, with tariffs now in place, the 'front-running' is over and the trade balances (imports) will adjust accordingly.
