U.S. trade data for 2025 show a modest improvement in the country’s overall trade gap alongside a larger record shortfall in goods, a category that President Donald Trump has targeted with broad import taxes. The Commerce Department reported Feb. 19 that the gap between what the United States sells to other countries and what it buys abroad narrowed to just over $901 billion from $904 billion in 2024, even as both exports and imports rose last year.
In the goods accounts, however, the deficit expanded and reached a record. The Commerce Department reported that the U.S. goods deficit widened 2% to $1.24 trillion in 2025, after a year in which U.S. imports increased nearly 5% and exports rose 6%, according to the department figures cited by the Associated Press. The goods shortfall covered items including machinery and aircraft, which Trump’s protectionist approach has emphasized.
The Commerce Department data also pointed to shifting bilateral patterns. The deficit in the goods trade with China plunged nearly 32% in 2025, as the reported gap narrowed sharply in both exports to China and imports from China amid continuing U.S.-China tensions. The overall change was coupled with what economists described as trade being diverted away from China toward other suppliers.
Chad Bown of the Peterson Institute for International Economics told the Associated Press that the widening gaps with Taiwan and Vietnam might create a political focus for the U.S. this year if Trump prioritizes the lopsided trade figures over the broader U.S.-China rivalry. In the reported trade figures, the goods gap with Taiwan doubled to $147 billion and the goods deficit with Vietnam rose 44% to $178 billion.
Other country relationships in the Commerce Department release also showed countervailing movements. The reported goods deficit with Mexico widened to nearly $197 billion in 2025, up from a 2024 gap of $172 billion. At the same time, the goods deficit with Canada shrank by 26% to $46 billion, and the United States was said to be negotiating a renewal of a pact Trump reached with Mexico and Canada in his first term.
The services side of trade also moved in a direction that supported the modest overall narrowing of the deficit. The Commerce Department reported that the United States ran a larger surplus in services last year, including areas such as banking and tourism, with the surplus at $339 billion in 2025 compared with $312 billion in 2024.
The pattern across the year followed a trajectory that tracked anticipation of tariff changes. The reported goods trade gap surged in the first quarter, as U.S. companies sought to import foreign goods ahead of Trump’s taxes, then narrowed most of the rest of the year.
Tariffs, as described in the Associated Press account, operate as a cost borne by U.S. importers and often passed along to customers as higher prices. Economists cited in the reporting said the tariffs have had less effect on inflation than some had originally expected, while Trump has argued that the import taxes protect American industries and help bring manufacturing back while also raising money for the Treasury.