US Trade Deficit Barely Shrinks in 2025 Despite Trump's Tariffs

The annual trade deficit in 2025 totaled $901.5 billion, a 0.2% decrease from 2024.

Published on Feb. 25, 2026

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The US trade deficit was largely unchanged in 2025 despite President Donald Trump's claims that his sweeping tariffs would rapidly shrink the gap. The annual trade deficit in 2025 totaled $901.5 billion, according to Commerce Department data, marking just a 0.2% decrease from 2024 in Trump's first year back in office.

Why it matters

Trump had repeatedly claimed his tariffs would dramatically reduce the US trade deficit, but the data shows his policies had little impact. The continued trade imbalance raises questions about the effectiveness of Trump's protectionist approach and the broader impact of his trade wars on American businesses and consumers.

The details

The trade gap sharply widened to $70.3 billion in December 2025, up $17.3 billion from November and well above economists' expectations. Throughout 2025, Trump rolled out widespread tariffs that he claimed would dramatically reduce the country's trade imbalance, but federal reports found that American businesses and consumers are bearing the brunt of the higher import prices.

  • The annual trade deficit in 2025 totaled $901.5 billion, according to Commerce Department data released on Thursday, Feb. 19.
  • The trade gap sharply widened to $70.3 billion in December 2025, up $17.3 billion from November.

The players

Donald Trump

The former president who imposed widespread tariffs that he claimed would dramatically reduce the US trade deficit.

Congressional Budget Office

A federal agency that concluded American businesses and consumers are responsible for 90-95% of the duties from Trump's tariffs.

Federal Reserve Bank of New York

Researchers who found that US shoppers and companies paid 94% of Trump's tariffs through the first eight months of 2025.

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What’s next

The Supreme Court is set to decide if Trump properly used the International Emergency Economic Powers Act to impose many of his tariffs, which could impact the future of his trade policies.

The takeaway

Despite Trump's claims, his sweeping tariffs had little impact on reducing the US trade deficit in 2025, underscoring the limited effectiveness of his protectionist approach and the significant burden placed on American businesses and consumers.