US Trade Deficit Plummets in April

THE US TRADE deficit narrowed sharply in April, with imports decreasing by the most on record as the front-running of goods ahead of tariffs ebbed, which could provide a lift to economic growth this quarter.

- Washington, June 5

The trade gap contracted by a record 55.5% to $61.6 billion, the lowest level since September 2023, the Commerce Department's Bureau of Economic Analysis said on Thursday. Data for March was revised to show the trade deficit having widened to an all-time high of $138.3 billion rather than the previously reported $140.5 billion.

Economists polled by Reuters forecast the deficit narrowing to $70.0 billion. The goods trade deficit eased by a record 46.2% to $87.4 billion, the lowest level since October 2023.

A rush to beat import duties helped to widen the trade deficit in Q1, which accounted for a large part of the 0.2% annualised rate of decline in gross domestic product last quarter. The contraction in the deficit, at face value, suggests that trade could significantly add to GDP this quarter, but much would depend on the state of inventories.